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HOUSE OF REPRESENTATIVES 

SIXTY-THIRD CONGRESS 


REPORT 


OF THE 


COMMITTEE ON THE MERCHANT MARIN; 
* AND FISHERIES 





ON 

STEAMSHIP AGREEMENTS AND AFFILIATIONS 

IN THE 

AMERICAN FOREIGN AND DOMESTIC TRADE 
UNDER H. RES. 587 


Prepared under direction of the Chairman of the Committee 

0 


S. S. HUEBNER 

INCLUDING THE RECOMMENDATIONS OF THE COMMITTEE 



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63d Congress ( 
2d Ses.non \ 


HOUSE OF REPRESENTATIVES 


j DoCrMENT 

I No. 805 


HOUSE OF REPRESENTATIVES 

SIXTY-THIRD CONGRESS 


REPORT 


OF THE 


COMMITTEE ON THE MERCHANT MARINE 

AND FISHERIES 


r r-'' 


ON < 

STEAMSHIP AGREEMENTS AND AFFILIATIONS 

IN THE 

AMERICAN FOREIGN AND DOMESTIC TRADE 
UNDER H. RES. 581 


Prepared under direction of the Chairman of the Committee 

BY 

S. S. HUEBNER 

INCLUDING THE RECOMMENDATIONS OF THE COMMITTEE 



NVA.SHTNOTON 

GOVERNMENT PRINTING OFFICH 

1914 

% 






COMMITTEE ON THE MERCHANT MARINE AND FISHERIES. 

House of Representatives. 


SIXTY-SECOND CONGRESS. 


.TOSnUA W. ALEXANDER, Missouri, Chairman. 


RUFFS HARDY, Texas. 

WILLIAM B. WILSON. Pennsylvania. 
CHARLES D. CARTER, Oklahoma. 
HENRY A. BARNHART, Indiana. 
JAMES W. COLLIER, Mississippi, 
STEVEN B. AYRES, New York. 
JOHN A. THAYER, Massachusetts. 
MICHAEL E. BURKE, Wisconsin. 
CLAUDE U. STONE. Illinois. 

JAMES D. POST, Ohio. 


JOHN M. FAISON, North Carolina. 


WILLIAM S. GREENE, Massachusetts. 
WILLIAM E. HUMPHREY, Washington. 
E. STEVENS HENRY, Connecticut. 
ASHER C. HINDS, Maine. 

STEPHEN G. PORTER, Pennsylvania. 
WILLIAM D. STEPHENS, California. 
THOMAS PARRAN, Maryland. 


H. H. Gar^'er, Clerk. 

S, S. Huebner, Expert to Committee. 

T. N. Lavelock, Counsel. 


(The hearings were conducted by the above-named committee. By House Resolution 
205, of the 63d Congress, the committee was authorized to conduct during the 63d Con¬ 
gress the investigation begun during the 62d Congress under House Resolutions 425 and 
587.) 


COMMITTEE ON THE MERCHANT MARINE AND FISHERIES. 


House of Repre.sentatives. 

SIXTY-THIKD CONGRESS. 


JOSHUA W. .ALEXANDER, Missouri, Chairman. 


RUFUS HARDY, Texas. 


LAD I SLA S LAZARO. Ix)uisiana. 
ANDREW R. BRODBE*Tv, Pennsylvania 


MICHAEL E. BURKE, Wisconsin. 

JOHN M. FAISON, North Carolina, 
EDWARD W. SAUNDERS, Virginia. 
THOM.CS C. THACHER. Massachusetts. 
STANLEY E. BOWDLE, Ohio. 

PETER J. DOOLING, New York. 
RICHARD S. WHALEY, South Carolina. 
FRANK O. SMITH, Maryland. 

HENRY BRUCKNER, New York. 


GEORGE W. LOFT', New York. 
WILLI.CM S. GREENE, Massachusetts. 
ASHER C. HINDS, Maine. 

CHARLES F. CURRY, California. 
.TAMES MANAHAN, Minnesota. 

GEORGE W. EDMONDS, Pennsjdvania. 
JAMES S. PARKER, New York. 

JAMES W. BRYAN, Washington. 


J. C. B-\y, Clerk. 

S. S. Hlebxeu, Expert to Committee. 

T. N. LAt'ELOCK, Counsel. 









CONTENTS. 




Page. 


Prefatory note. 1-17 

Resolutions authorizing the investigation. 1 

Methods of procedure and sources of data. 2 

Plan and purpose of the report. 7 

House resolution 425, Sixty-second Congress, second session. 8 

House resolution 587, Sixty-second Congress, second session. 9 

Schedule of inquiries submitted to domestic steamship companies. 10 

Schedule of inquiries submitted to foreign steamship companies. 13 

Schedule of inquiries submitted to American railroads. 14 

Schedule of inquiries submitted to American diplomatic and consular officers. 16 
Letter of inquiries submitted to American exporting and importing houses... 17 


PART I. 

STEAMSHIP AGREEMENTS AND AFFILIATIONS IN THE 

AMERICAN FOREIGN TRADE. 

Chapter I.—Passenger Agreements in the American-European Traffic. 


Page. 

Extent and nature of the North Atlantic passenger traffic. 21 

General nature and purpose of passenger agreements. 22 

N. D. L. V. and affiliated passenger agreements. 26-31 

N. D. L. V. (North Atlantic Steamship Lines Association) agreement. 26 

Agreement “L”. 28 

Agreement “G”. 29 

Agreement “J”. 30 

Agreement “ N’’. 30 

Passenger agreements affecting British and North Continental ports. 31-34 

Agreement “ A A ”. 31 

Agreement “ W ”. 33 

Agreement “ V ”. 34 

Mediterranean passenger agreements. 35-39 

Mediterranean steerage traffic agreement of February 8, 1909. 35 

Article 31 of the Mediterranean steerage traffic agreement. 37 

‘ ‘ Special agreement A ”. 38 

‘ ‘ Special agreement B ”. 39 

Summary of provisions and practices relating to passenger agreements in general. 39-45 

Manner of effecting settlements in the pooling arrangements. 40 

Corrective measures adopted by lines which exceed their percentages. 40 

Guaranties and penalties adopted for the enforcement of agreements. 42 

Regulations concerning the issuance of circulars and other publications. 42 

Regulation of agents. 43 

Administration of contracts, and adjudication of disputes. 44 

Admission of new lines to the conference and the alteration of existing 

agreements. 45 

Methods of meeting competition of nonconference lines. 45 

Steamship conferences in the North Atlantic passenger traffic. 40 

Agreements between American railroads and North Atlantic passenger lines.. 48 


m 






































IV 


CONTENTS. 


Chapter II.—Freight Agreements in the American-European Trade. 

Page. 

General nature of freight agreements. 53-57 

Reasons why deferred rebates are few in this trade. 54 

Classification of westbound agreements. 55 

Classification of eastbound agreements. 56 

Relations between lines operating from South Atlantic ports. 57 

Classification of freight agreements and conferences. 59-61 

Number of agreements. 59 

The Trans-Atlantic Freight Conference. 59 

The American Atlantic Conference. 60 

The Atlantic Conference. 60 

The Mediterranean Conference. 60 

Classification of agreements. 60 

Minimum-rate agreements in the trade to and from the United Kingdom.61-65 

Minimum eastbound rate agreements. 61 

The London Conference. 62 

The Liverpool Conference. 63 

The Glasgow Conference. 63 

The Manchester Conference. 64 

Nature of the minimum-rate understanding. 64 

Minimum westbound rate agreements. 65 

Agreements governing the trade between German, Dutch, Belgian, and 

French ports and the United States. 65-71 

Westbound agreements.•.. 65-70 

The N. D. L. V. westbound freight agreement. 65 

Freight traffic agreements contained in North Atlantic passenger 

agreements. 67 

Traffic arrangements with reference to the ports of Antwerp and 

Rotterdam. 68 

Traffic arrangement between the Russian East Asiatic Line and the 

Holland-American Line relative to Rotterdam. 69 

Minimum-rate agreement between lines operating from the Channel 

ports. 70 

Eastbound agreements. 70-71 

Absence of eastbound minimum rate agreements. 70 

Other agreements eastbound. 71 

Baltic freight agreements. 71-78 

The “ Baltic Pool ”.'. 71-75 

Enumeration of lines which are parties to the pool. 71 

The pool pertaining to “provisions”. 72 

The pool pertaining to “ agricultural ”. 73 

The pool pertaining to other leading articles of American export. 73 

General effects of the aforementioned pools. 74 

Agreements between lines operating to Scandinavian and Russian Baltic ports 75-77 

Adoption of a schedule of arbitraries by the Baltic pool lines. 75 

The Northern International Trans-Oceanic Traffic Association. 76 

Agreements with reference to lines operating between the United States and 

Norway. yg 

Mediterranean freight agreements. 78-87 

Mediterranean freight traffic agreement of 1911 covering westbound traffic_78-82 

Enumeration of lines and division of freight tonnage. 79 

Method of fixing rates. 79 

The deferred rebate system used. 79 














































CONTENTS. 


V 


Mediterranean freight agreements—Continued. 

Mediterranean freight traffic agreement of 1911 covering westbound traffic— 
Continued. - 

Regulation of freight contracts with shippers. 80 

Rendering of accounts by the lines belonging to the pool. 80 

Admission of new lines to the pool. 80 

Method of enforcing the agreement. 81 

Mediterranean eastbound freight agreement... 82 

Effect of Mediterranean agreements upon freight rates. 83 

Other Mediterranean freight agreements. 84-87 

Between Italian ports and the United States. 84 

Between Spain and the United States. 84 

Between Austrian ports on the Adriatic and the United States. 85 

In the American-Levant trade, eastbound. 86 

In the American-Levant trade, westbound. 87 

Existence of deferred rebates in the trade between the United Kingdom and 
ports on Puget Sound and the west coast of Canada. 89 

Chapter III.—Agreements in the American-African Trade. 

Understanding between the lines operating to south and east Africa.91-97 

Enumeration of the lines. 91 

Early rate wars in the trade. 91 

Pooling arrangement between the lines. 92 

Manner of determining rates. 93 

Abandonment of the deferred rebate system. 95 

The London Conference. 95 

The New York Committee. 95 

Nature of contracts made with shippers. 96 

Agreement governing the trade to the west coast of Africa. 97-100 

Reasons which led to the agreement. 97 - 

Enumeration of the lines. 98 

The control of rates. 98 

Nature of the service established. 99 

The method of pooling adopted. 99 

Other important terms of the agreement. 100 

Shipments to north African ports. 100 

Limited volume of such shipments. 100 

Indirect shipments from Egypt to the United States'via Liverpool. 101 

Chapter IV.—Agreements in the American-Australasian Trade. 

Direct shipments from New York to Australasian ports. 103-105 

Enumeration of Unes in the trade. 103 

Oral traffic agreement between the TMiite Star Line and the three direct lines. 105 

Trans-Pacific lines to Australasia. 106 

Return cargo to the United States. 107-108’ 

With reference to the port of New York. 107 

With reference to American Pacific coast ports. 107 

Chapter V.—Agreements in the American-Asiatic Trade. 

Agreements governing the eastbound and westbound trade between the Amer¬ 
ican Atlantic Seaboard and the Far East,, via Suez. 109-121 

Enumeration of steamship services, and classification of agreements. 109-112 

Volume of American-Asiatic trade via the Pacific and via the Atlantic 
ports compared. 110 











































VI 


CONTENTS. 


Agreements governing the eastbound and westbound trade between the Amer¬ 
ican Atlantic Seaboard and the Far East, via Suez—Continued. 

Enumeration of steamship services, and classification of agreements—Con. Page. 

Enumeration of lines in the Ear Eastern trade to and from New York.. 110 

Enumeration of agreements. HI 

Regulation of the number and order of the sailings of the several lines. 113 

Regulation of the booking of freight and the movement of steamers. 114 

Regulation of commissions and the transmission of communications. 115 

The control of rates. 115-117 

Eastbound rates. 115 

Westboimd rates. 115 

Methods of meeting and restricting competition—deferred rebates. 117-118 

Nature of deferred rebate system used. 118 

Reasons for adopting the deferred rebate system. 118 

The settlement of disputes and assessments of penalties. 119 

Pooling agreement between the owners of steamers operating under the terms 

of the eastward and westward agreements. 119-121 

Method of settling the pool account. 120 

Method of administering the pool. 120 

Steamship conferences, eastbound and westbound, in the trade between the 

Atlantic Seaboard and the Far East via the Suez. 121-122 

The New York Conference. 121 

The Hongkong and Singapore Gonferen,ces. 121 

The London Conference. 122 

Agreements in the trade with India. 122-126 

Understanding between the direct lines operating to and from New York. 122-124 

Pooling and other conditions of the agreement. 122 

Control of rates. 123 

Relations between lines operating in the indirect trade between the United 

States and India, via Europe. 124-126 

Karachi trade. 125 

Bombay trade. 125 

Madras trade. 126 

Rangoon trade. 126 

Agreement in the America-Java trade. 127 

Agreements among the trans-Pacific Lines. 128-142 

Enumeration of the regular lines, and the conferences to which they are 

parties. 128 

Nature and purpose of the conferences in the eastbound trade. 129 

The Trans-Pacific Tariff Bureau (Japan branch). 130-133 

Enumeration of lines belonging to the bureau . 131 

Deferred rebate system used. 131 

Pacific Mail Steamship Co.’s deferred rebate circular. 131 

Trans-Pacific Tariff Bureau (Hong Kong, China, branch). 133-134 

Tariffs issued by the lines belonging to the bureau. 133 

Absence of any deferred rebate system, and the reasons. 133 

Threatened disruption of the Trans-Pacific Tariff Bureau, eastbound. 134-135 

By the secret cutting of rates, through presents, and special induce¬ 
ments. 134 

By underweighing the freight. 135 

Influence of trans-Pacific conferences on rates. 137 

Trans-Pacific Tariff Bureau, westbound. 138-139 

Nature of the bureau, and the tariffs issued. 138 













































CONTENTS. Vn 

Agreements among tlie trans-Pacific Lines—Continued. 

Understanding between the Pacific Mail Steamship Co. and the Toyo Risen Page. 

Kaisha, westbound from San Francisco. 139-141 

Terms of the agreement. 139 

Events which led to the agreement. 140 

Rates charged by the Pacific Mail Steamship Co. and the Toyo Risen Raisha, 

westbound from San Francisco. 141 

Agreements in the Japan-Hawaii and Japan-Philippine trade. 141 

Passenger agreement in the tians-Pacific trade. M2 

The Calcutta-Pacific Conference. 142-145 

Lines belonging to the conference. 142 

Terms of the agreement. 143 

Control of rates. 143 

Pooling arrangement used. 143 

Deferred rebate system used.144 

Agreements between American railways and trans-Pacific steamship lines... 145-152 

Enumeration of such agreements. 146 

Agreements between railroads and San Francisco trans-Pacific lines. 146-148 

Agreement between the Toyo Risen Raisha and the Western Pacific 

Railway Co. 146 

Agreements entered into by the Pacific Mail Steamship Co. 148 

Agreements between American railroads and north Pacific steamship lines 

belonging to the Trans-Pacific Tariff Bureau. 148-152 

Agreement between Messrs. Alfred Holt & Co. and the Northern Pacific 

Railway Co. and the Great Northern Railway Co. 148 

Agreement between the Osaka Shosen Raisha and the constituent com¬ 
panies of the Chicago, Milwaukee & St. Paul Ry. system. 150 

Agreement between the Nippon Yusen Raisha and the Great Northern 

Railway Co. 151 

Relations between other north Trans-Pacific lines and transcontinental 
raihoads. 152 

Chapter VI.—Agreements in the Trade Between the United States 

and South America. 

Page. 

Classification of steamship services. 153 

Agreements in the American-Brazilian trade. 154-168 

Enumeration of agreements. 154 

Provisions of the agreements. 155-158 

Regulation of sailings. 155 

Fixing and maintenance of rates. 156 

Deferred rebate system, northbound, but none southbound. 157 

Settlement of disputes. 158 

Termination of the pooling agreement of July 8, 1908. 158 

Conferences governing the trade. 159-168 

The New York Conference and its functions. 159 

The London Conference and its functions. 159 

Contracts with shippers. 160 

Contracts made by each line for its own steamers. 160 

Joint contracts made by one line on behalf of all conference lines. 160 

Deferred rebate system in the trade, northbound. 160 

Arguments in favor of the deferred rebate system. 161 

Effectiveness of the deferred rebate system against nonconference lines. 163 









































VIII 


CONTENTS. 


Agreements in the American-Brazilian trade—Continued. 

Policy of keeping rates from the United States on a parity with those from Page. 

Europe... 

Understanding between the Booth Line and the three conference lines operat¬ 
ing to and from southern Brazil. 

Agreements in the trade between the United States and the River Plate. 170-175 

In the southbound trade. 170-174 

Conference meetings and their purpose... 170 

’ System of contracts used. 170 

Other conditions of the agreement governing the southbound trade... 171 

Method of making rates. 171 

Contracts with shippers. 172 

Position of the Norton Line with reference to the conference. 174 

In the northbound trade. 174 

Deferred rebate system used. 174 

Tacit understanding between the Brazilian and River Plate lines to respect 

each other’s territory. 175 

Agreement governing the traffic to and from Venezuela and Curacao. 175-176 

Enumeration of steamship services. 175 

Differential rate understanding between the Royal Dutch West India Mail 

Line and the Red “D” Line. 176 

Agreements governing the traffic to and from Colombian ports on the Caribbean 

Sea. 176-179 

Agreements between the Royal Mail Steam Packet Co. and the Hamburg- 

American Line’s Atlas service... 176-178 

Pooling agreement between the lines. 177 

Fixing and maintenance of rates. 178 

Division of ports between the lines. 178 

Deferred rebate system, both northbound and southbound. 178 

Tacit understanding between the United Fruit Co., and the Royal Mail Steam 

Packet Co. and the Hamburg-American Line. 179 

Agreements in the traffic between the Atlantic seaboard of the United States 

and the west coast of South America via Panama. 180-184 

Agreements in the southbound trade. 180-182 

Enumeration of steamship services. 180 

Enumeration of agreements. 181 

Origin of the agreements. 182 

Agreements in the northbound trade. 182-184 

Relations between the west coast steamship lines connecting with the 

New York lines at the Isthmus of Panama. 182 

Relations between the lines operating from New York to the west coast of South 

America, and vice versa, via the Straits of Magellan. 184-187 

Nature of the trade, and the method of determining rates in the southbound 

trade. 184 

Contracts with shippers in the southbound trade. 186 

Relations between the lines in the northbound trade. 187 

Relations between the lines engaged in the trade between the Pacific ports of 
the United States and the west coast of South America. 188 




































CONTENTS. 


IX 


Chapter VII.—Agpeements in the American-Mexican and Central 

American Trade. 

Relations between the lines operating between the Atlantic and Gulf ports of Page. 

the United States and eastern ports of Mexico and Central America. 189-194 

With reference to eastern Mexican ports. 189-191 

Tampico. ]89 

Vera Cruz. 190 

Puerto Mexico. 191 

Other eastern Mexican ports. 191 

With reference to British Hondums. 191 

Dominant position of the United Fruit Co. 15^1 

With reference to Guatemala. 191 

Dominant position of the United Fruit Co. 192 

With reference to Spanish Honduras.x. 192-193 

Enumeration of lines operating to and from the United States. 192 

Dominant position of the United Fruit Co. 193 

With reference to Nicara^ga. 193 

Dominant position of the United Fruit Co... 193 

With reference to Costa Rica. 194 

Enumeration of the services. 194 

Agreement of February 21, 1908, between the Royal Mail Steam Pac¬ 
ket Co., and the Hamburg-American Line. 194 

' United Fruit Co.’s observance of the above-mentioned agreement_ 194 

Rate understanding between the lines operating in the trade between New 
York and the west coast of Central America and Mexico via the Isthmus of 

Panama. 195 

Relations between the lines operating between Pacific coast ports of the United 

States and the west coast of Central America and Mexico. 196-199 

Enumeration of steamship lines and the relations between these lines. 196 

Dominant position of the Pacific Mail Steamship Co. 196 

Rebates to shippers discontinued. 199 

Conference of West India Atlantic Steamship Companies. 200-203 

Membership of the conference. 200 

Deferred rebate agreement used. 200-203 

Its application to the Central American-New-York trade. 201 

The system does not apply to the Central American-San Francisco 

trade. 201 

Copy of rebate circular issued to shippers. 203 

Chapter VIII.—Agreements in the American-West Indian Trade. 

Rate arrangements in the trade between the United States and Cuba.. .T- 205-212 

Lines between New York and Cuba... 205-208 

The New York and Cuba Mail Steamship Co. and the American & 

Cuban Steamship Line to Havana. 205 

The Companfa Marltima Cubana and the Royal Mail Steam Packet 

Co. to north Cuban ports. 206 

The New York and Cuba Mail Steamship Co. and the Hamburg- 

American Line to south Cuban ports. 207 

The Caribbean Conference. 208 

Lines between North Atlantic ports, other than New York, and Cuba. 208-209 






































X 


CONTENTS. 


Rate arrangements in the trade between the United States and Cuba—Con. Page, 

Lines operating between Gulf ports and Cuba—The Gulf Foreign Freight 

Committee. 209-212 

Agreements in the trade between the United States and Haiti and Santo Do¬ 
mingo. 212-214 

Enumeration of services. 212 

Agreement between the Hambiirg-American Line and the Royal Dutch West 

India Mail Line with respect to Haiti. 212-214 

Division of ports between the lines... 212 

Pooling arrangement between the lines. 213 

•Maintenance of rates. 213 

Agreement between the Hamburg-American Line and the Royal Mail Steam 

Packet Co. with respect to Haiti. 214 

Agreement in the trade between the United States and Jamaica. 214-216 

Enumeration of services. 214 

Agreement and understanding between the Royal Mail Steam Packet Co., 

the Hamburg-American Line, and the United Fruit Co. 215-216 

Deferred rebate system in the trade. 215 

Origin of the agreement. 216 

Agreement between the lines operating to and from Trinidad. 218-219 

Enumeration of lines in the trade. 218 

Deferred rebate agreement in the northbound trade. 218 

Maintenance of rates, both northbound and southbound. 219 

Relations between lines operating to and from Martinique, Guadeloupe, and 

Barbados. 219-223 

Lines operating to and from Guadeloupe and Martinique. 219 

Practices of the Quebec Steamship Co,, the dominant carrier. 219-221 

Basing rates on the quantity shipped. 219 

Contracts with shippers according to the quantity shipped. 220 

Granting of rebates. 220 

Criticism of above-mentioned contracts. 221 

Rebate system in the New York-Bermuda trade. 222 

Lines to and from Barbados. 223-225 

Enumeration of services. 223 

Relations between the lines in the trade. 223 

The Porto Rican trade. 225-238 

Enumeration of regular line services. 225 

Early rate wars in the trade. 226 

The present rate war in the trade. 229 

Attempts to effect a settlement. 232 

Friendly relations between the Insular and New York & Porto Rico Steam¬ 
ship Lines. 233 

Rates from New York, New Orleans and Galveston to Porto Rico com¬ 
pared....... 235 

Contracts with shippers and discrimination in rates between shippers. 236 

Chapter IX.—Agreements Between American Railroads and Foreign 

Steamship Lines. 

Extent of agreements. 239-241 

Nmnber of agreements and how obtained by the Committee. 240 

Distinction between “preferential” and “exclusive” contracts. 240 

Agreements with reference to Atlantic ports. 241-249 

With reference to New York. 241 

With reference to Boston. 242 

















































CONTENTS. 


XI 


Agreements with reference to Atlantic ports—Continued. Page. 

With reference to Philadelphia and Baltimore. 246 

With reference to Newport News and Norfolk. 248 

With reference to Brunswick. 249 

Agreements with reference to Gulf ports. 250-257 

With reference to Galveston and New Orleans. 250 

With reference to Mobile. 250-253 

With reference to the South American trade. 251 

With reference to Cuba, Mexico, and the West Indies. 253 

With reference to Liverpool, Bremen, Hamburg, and other European 

ports. 253 

With reference to Port Arthur. 255 

With reference to Pensacola and Port Aransas. 256 

Agreements with reference to trans-Pacific steamship lines. 257-258 

Exhibits of agreements. 259-280 

Agreement between the Boston & Maine Railroad Co. and the Hamburg- 

American Line with reference to the Boston-Hamburg service. 259 

Agreement between the United States Shipping Co. on behalf of the 
Hamburg-American Line and the railroads centering at Newport News 

and Norfolk. 261 

Agreement between the Munson Steamship Line and the Mobile & Ohio and 
Southern Railroad Companies, relative to the Mobile-South American 

trade.1. 264 

Agreements and arrangements between the transcontinental railroads and 

trans-Pacific carriers. 271 

Between the Toyo Kisen Kaisha and the Western Pacific Railroad Co. 271 

Replies of the Atchison, Topeka & Sante Fe and Southern Pacific 
Railway Companies to the Committee’s Schedule of Inquiries ... 275 

Between Alfred Holt & Co. and the Northern Pacific and Great 

Northern Railway Companies. 276 

Between the Osaka Shosen Kaisha and the Chicago, Milwaukee & St. 

Paul Railway Co. 278 

Between the Nippon Yusen Kaisha and the Great Northern Railway 
Co. 279 


Chapter X.—Summary—Methods of Control in Connection with Ship¬ 
ping Conferences and Agreements—Advantages and Disadvantages 
of Such Conferences and Agreements—Recommendations for Pro¬ 
posed Legislation. 

Methods of control exercised in connection with steamship conferences and 


agreements in the American foreign trade. 281-293 

Regulation of competition between the lines. 282-287 

Rate agreements. 282-284 

Fixed rate agreements. 282 

Minimum rate agreements. 282 

Differential rate agreements. 283 

Control of rates by the dominant carrier. 283 

Apportioning traffic by allotting the ports of sailing. 284 

Restricting the number of sailings. 285 

Limiting each line’s volume of freight.•. 285 

Pooling arrangements. 285 

Agreements between conferences, or groups of lines. 286 

Making deposits as a guaranty of good faith. 286 



































xn 


CONTENTS. 


Methods of control exercised in connection with steamship conferences and 

agreements in the American foreign trade—Continued. Page 

Meeting the competition of nonconference lines. 287-293 j 

Deferred rebate systems. 287 ! 

The use of fighting ships, or collective competition. 289 

Contracts with shippers. 290-292 

Joint conference contracts. 290 

Contracts by individual members of the conference. 290 

Contracts based on volume of shipments. 291 

Agreements with American railroads. 292-293 

Secrecy of agreements and prevalence of oral understandings. 293-295 

Advantages of shipping conferences and agreements. 295-297 

Improvement in service. 295-297 

Regularity of service and advantages resulting therefrom. 295 

Greater security to capital invested, and advantages resulting there¬ 
from . 297 

Stability of rates and advantages resulting therefrom. 297-300 

Uniform freight rates secured to all merchants. 300 

Prevention of the elimination of weaker lines in the various trades. 300-301 

Maintenance of American and European rates to foreign markets on a 

parity. 301-302 

Reduction in the cost of service. 302 

Cost of service more economically distributed over the traffic. 302-303 

Disadvantages of shipping conferences and agreements as now conducted. .. 304-307 

The monopolistic nature of such conferences and agreements. 304-306 

Arbitrary increase in rates alleged. 306 

Secrecy of agreements and conference arrangements opposed. 307 

Contracts based on a large volume of freight opposed. 307 

Charge that some conference lines do not observe customary conference 

usages in respect to equal treatment of shippers. 307 

Practice of certain conference lines not to publish their tariffs or classifica¬ 
tions opposed. 307 

Deferred rebate systems opposed. 307 

Leading recommendations of witnesses for proposed legislation. 307-314 

Government regulation of carriers engaging in the American foreign trade. 307-308 
Impracticability of filing rates with the Government and requiring a period 

of notice before changing the same. 309-311 

Publicity of agreements and arrangements.311-313 

Other recommendations. 313-314 

PAKT II. 

STEAMSHIP AGREEMENTS AND AFFILIATIONS IN THE 

AMERICAN DOMESTIC TRADE. 

Chapter XI.—Steamship Company Affiliations on the Great Lakes. 

Page. 

Control of the through package freight business by railroad-owned boat lines. 317-328 

Enumeration of railroad-owned steamship lines. 317-319 

Methods by which the railroads have prevented independent water car¬ 
riers from participating in the through package -freight traffic.319-324 

Railroad control of merchandise originating on the railroads. 320 

Attempt of railroads to control the eastern grain movement on the 

Lakes by charging full local rates from Buffalo. 320 

Railroad control of terminal facilities. 323 * 






































CONTENTS. 


xin 


Control of the through package freight business by railroad-owned boat 

lines—Continued. Pase. 

Railroad control of the Erie Canal. 324-328 

Railroad control of canal boat lines. 325 

Railroad’s refusal to exchange freight with independent canal lines 

or forwarders. 326 

Railroad’s policy of acquiring terminal facilities at both Buffalo and 

New York. 327 

The effects of railroad control of through Lake lines and canal forwarding 

agencies. 328-331 

Increase in water rates on through package freight. 328 

Failure to improve the service. 330 

Leading American Lake lines not owned by railroads. 331-336 

Enumeration of such lines. 331 

Relationship between such lines. 334 

Comparison of current rates charged by such lines. 335 

Consolidations among bulk carriers on the Great Lakes. 336-346 

Tendency toward improved type of steamers, improved loading and un¬ 
loading facilities and lower rates in the bulk traffic.336 

Tendency toward consolidations among bulk carriers. 337 

Affiliations among leading consolidations of bulk carriers and between such 

consolidations and other groups of bulk carriers. 341 

Chapter XII.—Steamship Company Affiliations on the Pacific Coast. 

The Pacific coast trade proper. 347-351 

Enumeration and description of the lines. 347 

Relations between the lines, and between the lines and railroads, explained.. 349 

The trade between Puget Sound and Alaska. 351-356 

Enumeration of the trade routes and steamship fines operating on each.... 351 

Steamship consolidations in the Alaskan trade. 352 

The trade between the Atlantic and Pacific seaboards of the United States.. 357-365 

Enumeration of routes and steamship services. 357 

Volume of intercoastal traffic via the several routes. 358 

Influence of intercoastal water carriers upon transcontinental rates. 361 

Traffic arrangements between the intercoastal lines. 363 

The Hawaiian trade. 365-368 

Enumeration of lines operating to and from the United States. 365 

Inter-Island trade of Hawaii. 367 

Relations between the lines operating in the Hawaiian trade. 367 

Chapter XIII.—Steamship Company Affiliations on the Atlantic and 

Gulf Coasts. 

The predominant importance of lines controlled by railroads and shipping 

consolidations. 369-372 

The New England coastwise trade. 372-383 

Navigation companies controlled by the New York, New Haven & Hart¬ 
ford Railroad Co. 373 

The Eastern Steamship Corporation. 378 

Affiliations of the Eastern Steamship Corporation with other navigation 

interests. 379 

Dominant position of the New York, New Haven & Hartford Railroad Co. 

and the Eastern Steamship Corporation. 380 

Independent lines in the New England coastwise trade. 381 




































XIV 


CONTENTS. 


Page. 

The Middle and South Atlantic coast trade. 383-389 

Enumeration of regular line services in the trade. 383 

The Atlantic Gulf & West Indies Steamship Lines. 383 

Railroad-owned lines. 386 

Lines not controlled by railroads or by the Atlantic Gulf & West Indies 

Steamship. Lines. 388 

The Atlantic coast-Gulf coast trade. 389-398 

Enumeration and description of regular line services. 389 

Affiliations between the lines. 389 

Methods adopted by established lines in opposing the establishment and 

maintenance of independent lines. 392-398 

Discouraging the flotation of stock. 392 

Rendering difficult the purchasing, chartering, or construction of 

steamers.. 392 

Employing “fighting ships. 393 

Engaging persons to divulge information. 394 

Discriminating in marine insurance rates. 395 

Granting rebates to shippers. 395 

Refusing membership to independent lines in tariff committees.... 396 

Relations between the railroads and Atlantic coast steamship lines. 398-401 

Traffic arrangements between rail and water carriers. 398 

Refusal of railroads to enter into through routing and prorating arrange¬ 
ments on package freight with independent lines. 400 

Vital importance of this subject. 400 

Illustrations of such refusal. 400 

Chapter XIV.—Summary—Extent and Methods of Control of Competition 
Between Water Carriers in the Domestic Trade. 

Extent of control. 403-408 

In the Atlantic and Gulf coastwise trade. 403 

In the Great Lakes trade. 405 

In the Pacific coast trade. 405 

General summary for the above three divisions of the domestic trade. 405 

On inland rivers, bays, and canals. 406 

Methods of control summarized. 409-412 

Control through the acquisition of water lines or the ownership of acces¬ 
sories to the lines. 409 

Control through agreements or understandings. 410 

Control through special practices. 410 

Recommendations of the Committee. 

Recommendations relating to water carriers engaged in the foreign trade_415-421 

Recommendations relating to water carriers engaged in the domestic trade.. 421-424 
Subject index. 425-459 

































LIST OF TABLES AND CHARTS. 


TABLES. 

Minimum eastbound rate agreements between lines operating from the United Pages. 

States to British ports. 62-64 

Lines and owners of vessels operating in the Far Eastern trade to and from 

New York. 110-111 

Agreements between trans-Pacific steamship lines and American railroads.. 146 
Leading Lake lines controlled by American railroads (showing size of lines, 

routes, and nature of railroad control). 318-319 

Rate differentials between all-rail and rail-and-water routes between Chicago 

and New York. 328-329 

Leading American Lake lines not owned by railroad companies (showing size 

of lines, routes, and relations with other carriers). 332-334 

Eight leading consolidations of bulk carriers on the Great Lakes (showing 
the number of vessels of each, the total gross tonnage represented, and the 
proportion this tonnage bears to the total American Great Lakes tonnage... 341 

Pittsburg Steamship Company’s charter relations with seven large vessel 

ownerships on the Great Lakes. 342 

Ownership of Great Lakes bulk carriers with a tonnage of 1,000 or over 
(showing total number and tonnage of vessels controlled by 37 affiliated 

groups). 346 

Names, number of vessels, and routes of important Pacific coastwise lines .. 348 

Names, number of vessels, and tonnage of navigation companies controlled 

by the New York, New Haven & Hartford R. R. Co. 374 

Names, number of vessels, tonnage, and routes of lines operated by the 

Eastern Steamship corporation. 378-379 

Names and routes of independent New England coastwise lines. 381 

Names and routes of important Middle and South Atlantic coastwise lines.. 382 

Enumeration of Middle Atlantic and South Atlantic coastwise lines (giving 

names of lines, number of steamers, and gross tonnage). 383 

Lines controlled by the Atlantic, Gulf and West Indies Steamship Lines 
(giving names of lines, number of vessels, gross tonnage, and character of 

control) . 384 

Names, number of vessels, gross tonnage and routes of lines connecting 

Atlantic coast and Gulf coast ports. 389 

Control of steamship lines engaged in the Atlantic, Gulf, and Pacific coast, 
and Great Lakes trade (giving (1) number of lines, number of steamers and 
gross tonnage; and (2) percentage of steamers and gross tonnage owned or 
controlled, respectively, by railroads, shipping consolidations, and inde¬ 
pendent lines). 404 

CHARTS. 

Facing page. 

Passenger agreements in the North Atlantic traffic. 22 

Freight agreements in the North Atlantic-European trade. 60 

Agreements among direct lines in the American-Asiatic trade. 110 

Agreements and understandings among direct lines operating between the United 

States and South America.:.154 

Affiliated bulk carriers operating on the Great Lakes. 343 


XV 





















V 


PREFATORY NOTE. 


^^le following report on ^‘Steamship Agreements and Affiliations in 
the American Foreign and Domestic Trade’’ represents a summary of 
the data gathered by the Committee on The Merchant Marine and 
Fisheries in its investigation of steamship combinations under House 
Resolutions 425, introduced by Mr. Rufus Hardy of Texas, on 
February 24, 1912, and 587, introduced by Mr. J. W. Alexander 
of Missouri, Chairman of the Committee, on June 18, 1912. (Copies 
of these resolutions are found on pp. 8 and 9 of this report.) 
The investigation was begun in pursuance of House Resolution 425, 
but it was later deemed expedient to broaden the scope of this resolu¬ 
tion so as to extend the investigating powers of the Committee to 
every possible transportation agency (such as forwarding, dock, ter¬ 
minal and all other companies and firms) which might be connected 
in any way with foreign or domestic water carriers, or with the rail¬ 
roads, and a knowledge of which might be essential in ascertaining 
the full relationship between the navigation companies themselves, 
as well as between such companies and the railroads. Accordingly 
House Resolution 587 was substituted for House Resolution 425, 
but, with the exception noted, this resolution was identical with its 
predecessor. The Committee was also authorized by House Resolu¬ 
tion 205, of the Sixty-third Congress, introduced by Chairman J. W. 
Alexander, to continue during the Sixty-third Congress the investiga¬ 
tion begun during the Sixty-second Congress under the provisions of 
House Resolutions 425 and 587. 

It should be stated that a joint resolution was originally introduced 
by Mr. Humphrey of Washington providing for a joint committee 
of the House and Senate to investigate foreign shipping rings. Mr. 
Hardy, of Texas, subsequently introduced a joint- resolution extend- 
ing the inquiry embraced in Mr. Humphrey’s resolution to include 
our domestic shipping and the relations between American railroads 
and foreign and domestic shipping. 


25655 “— VOL 4—14 - 1 


1 




2 


PREFATORY NOTE. 


On April 20; 1911, and January 30, 1912, Mr. Humphrey of Wash¬ 
ington introduced House Joint Resolution 72 and House Resolution 
399, respectively, and on January 18, 1912, Mr. Hardy, of Texas, 
introduced House Joint Resolution 217. These resolutions were 
substantially the same in their purpose as House Resolutions 425 
and 587, except that House Joint Resolutions 72 and 217 provided 
for a joint committee to undertake the investigation. Hearings were 
held by the Committee on Rules on House Joint Resolution 72, 
beginning December 18, 1912, with the result that the Committee on 
Rules decided to report a resolution directing the Committee on the 
Merchant Marine and Fisheries to make the investigation, and for 
this purpose, as already explained. House resolutions 425 and 587 
were reported to the House and adopted. 

Methods of Procedure and Sources of Data. 

In view of the wide scope of the investigation, the same com¬ 
prising the country’s entire domestic and foreign trade by water, the 
Committee adopted the policy of gathering as much data as possible, 
in advance of the pubhc hearings, by the issuance of detailed Sched¬ 
ules of Inquiries to water and rail carriers. This was done because 
the data thus obtained would not only greatly reduce the extent of 
the pubhc hearings, but would enable the Committee to select wit¬ 
nesses to the greatest advantage and to emphasize in the hearings 
only those phases of the investigation concerning which further 
information was desired. The following outline will serve to indi¬ 
cate briefly the method of procedure followed by the Committee, and 
the chief sources of the data obtained. 

(1) Three comprehensive Schedules of Inquiries, each prepared to 
meet fuUy the requirements of House Resolution 587 (and published on 
pp. 10,13, and 14), were respectively directed by Chairman Alexander, 
(1) under date of August 21, 1912, to 562 domestic navigation com¬ 
panies engaged in the coastwise, lake and inland commerce of the 
United States; (2) under date of October 3, 1912, to practically all 
steamship lines engaged in this country’s foreign trade; and (3) under 
date of September 16,1912, to all the leading railroads of the country. 
The managements of all the aforementioned navigation and railroad 
companies, it should be added, were requested to submit their answers 
to the inquiries under oath. Of the 562 domestic navigation com¬ 
panies referred to 470 complied with the Committee’s request, and 


PREFATORY NOTE. 


3 


the replies included practically aU of the important regular lines and 
large bulk carriers. Similarly, of the 187 railroad companies or sys¬ 
tems to which the Schedule of Inquiries was sent, 180 submitted 
their answers to the Committee. As was expected, the foreign 
steamship hnes did not respond as readily as the domestic water and 
rail carriers; yet of the 208 lines to which the Schedule was sent 88 
made full returns under oath, this number representing hnes engaged 
in nearly every sphere of this country's foreign trade. Moreover, 
since nearly aU the foreign steamship lines are organized in confer¬ 
ences or operate under agreements as regards their respective routes 
to and from the United States, it follows that the replies of one line 
would answer, from the standpoint of the Committee's requirements, 
for the entire group of conference lines. In fact, in a considerable 
number of instances, it appears that the Committee’s request received 
joint action by a number of conference hnes and that one hne was 
delegated to submit answers for the entire group. 

Considered in their entirety, the sworn replies of the domestic and 
foreign water carriers and the railroads proved a most valuable source 
of information, and a very considerable portion of this report is based 
upon the facts thus obtained. It may be added that, as the replies 
to the Committee’s inquiries showed the existence of agreements or 
afhliations which required a more detailed explanation than that 
given, further details were obtained by correspondence with the par¬ 
ties involved. The proper officials of all rate, tariff and traffic asso¬ 
ciations, both with reference to water and rail carriers, were also 
requested to furnish copies of the associations’ constitutions and 
by-laws and any tariffs published, as well as an explanation of the 
associations’ purposes. 

~ (2) The Department of State cooperated with the Committee by 
issuing at the request of Chairman Alexander, under date of April 17, 
1912, a circular of instructions, containing six interrogatories (repro¬ 
duced on p. 16), to the diplomatic and consular representatives of 
the United States in foreign countries for the preparation of reports 
on those methods and practices of foreign steamship lines engaged in 
the American Foreign trade that were contemplated under the terms 
of the aforementioned resolutions. In response to this circular of 
instructions 94 reports, representing practically every country of 
any importance in the import and export trade of the United States, 


4 


PREFATORY NOTE, 


were prepared for the special use of the Committee, and have been 
published in volume 3 of the Committee’s Proceedings. In many 
instances the reports received by the Committee were accompanied 
by numerous exhibits—principally copies of laws, reports and freight 
tariffs—of such a voluminous character that their publication seemed 
impracticable, although they proved of the greatest usefulness to 
the Committee in its investigation. 

(3) Under date of September 3, 1912, the Department of State 
also requested American diplomatic and consular representatives to 
procure for the Committee the current freight tariffs or rates of the 
steamship lines engaged in our foreign trade, as regards the voyage 
to American ports. This request also met with a very general re¬ 
sponse, and in many instances the reports supplemented in impor¬ 
tant particulars the reports furnished in response to the State De¬ 
partment’s circular of April 17, 1912. 

(4) All boards of trade, chambers of commerce, produce ex¬ 
changes and other leading commercial and shipping organizations 
were invited by the Committee in August, 1912, to be heard at the 
Committee’s hearings or to file with the Committee, under promise 
of confidential treatment if so desired, any complaints, suggestions 
or information coming within the scope of the resolution. A con¬ 
siderable number of' these associations either filed written reports 
with the Committee, or requested to be given a hearing through a 
representative, relative to conditions coming within the pm-view of 
the resolutions authorizing the investigation. 

(5) Much assistance was obtained thi-ough the cooperation of the 
Department of Justice, which gave the Committee access to the 
testimony and exhibits in the cases now pending against various 
foreign and domestic water carriers for alleged violation of the 
Sherman Anti-Trust Law. The publications of the Bureau of Cor¬ 
porations on ^‘Transportation by Water in the United States” and 
the decisions and files of the Interstate Commerce Commission 
proved to be valuable aids to the Committee. Moreover, much 
information was obtained from the “Report of the Royal Commis¬ 
sion on Shipping Rings” and from the leading shipping journals. 
The New York Committee, appointed by the representatives of 
steamship lines maintaining established services from New York to 
foreign countries, also submitted a report to the Committee (published 
in vol. 2, pp. 1357-1375 of the Committee’s Proceedings), which 




PREFATOKY NOTE. 


5 


presents a comprehensive statement of the reasons which lead to 
the formation of steamship agreements and conferences, and the 
advantages resulting from such arrangements. 

(6) Following the receipt of most of the replies to the Schedule of 
Inquiries addressed to the foreign and domestic water carriers and the 
railroads, as well as to American diplomatic and consular repre¬ 
sentatives, and after a general survey had been made of the data 
secured through all of the aforementioned sources of information, the 
Committee held public hearings with a view to making the investi¬ 
gation more complete. The chief purpose of these hearings was to 
ascertain certain facts which did not appear clearly from the in¬ 
formation already obtained, and to give all shipping and steamship 
interests which so desired, an opportunity to present their grievances, 
suggestions for remedial legislation, or other contentions. These, 
hearings extended from January 7 to March 3, 1913, and the evidence 
was published in the first two volumes of the Committee’s Proceed¬ 
ings. In all 55 witnesses were heard, the same having been selected 
(1) with reference to their apparent ability, jjadging from their re¬ 
lations to various steamship lines, to explain the nature of the steam¬ 
ship agreements or affiliations existing in the several divisions of our 
foreign and domestic trade, and (2) with a view to having all the 
geographic trade zones properly represented. Thirty-two witnesses 
represented important steamship lines which had agreements or 
affiliations with other lines; while eight represented so-called inde¬ 
pendent lines, and appeared before the Committee to explam the 
difficulties which they encountered in meeting the practices of the 
so-called conference lines. Nearly all of the other witnesses appeared 
as representatives of freight bureaus, boards of trade and other 
commercial associations. While numerous individual shippers vol¬ 
untarily presented their grievances to the Committee, under promise 
of confidential treatment, very few were willing (fearing retaliation) 
to testify openly against the steamship line or lines upon which they 
were dependent for the movement of their freight. 

(7) At the conclusion of the hearings, and in view of the conten¬ 
tions of the conference line representatives and the reluctance of 
shippers to express their complaints openly for fear of retaliation, the 
Committee decided, under promise of confidential treatment, to 
ascertain approximately the extent to which leading shippers indorsed 


6 


PBEFATOBY NOTE. 


the views of the conference line representatives. Accordingly, the 
Committee addressed a circular letter, under date of February 18, 
1913, (for copy see p. 17) to approximately 2,000 individuals and 
firms, this number including manufacturing firms, exporting largely 
to foreign markets, as well as all export commission houses, for¬ 
warders, brokers and managers enumerated in the 1912 issue of the 
American Exporters’ Export Trade Directory for the ports of New 
York, Boston, Philadelphia, Baltimore, New Orleans, San Francisco, 
Portland, Seattle and Tacoma. Nearly 300 replies were received 
in response to the above-mentioned letter, the majority of the commu¬ 
nications expressing in detail the reasons for their approval or dis¬ 
approval of steamship conferences and agreements. These replies 
have been classified and summarized in volume 2 (pp. 1397-1408) of the 
Committee’s Proceedings. Although a more general response would 
have proven more conclusive, the replies received indicate the posi¬ 
tion taken by leading exporting and importing interests of this coun¬ 
try regarding the advantages and disadvantages of steamship con¬ 
ferences as now conducted. This is particularly the case, since 
most of the replies came from large manufacturing and export¬ 
ing commission houses, whose business operations extend to many 
geographic divisions of our foreign trade, and whose many years 
of experience have given them the opportunity to compare con¬ 
ditions prevailing under both the competitive and noncompetitive 
systems in the shipping business. 

(8) Although our diplomatic and consular representatives were in¬ 
structed to report the extent to which the countries of their official 
residence grant subsidies, subventions, bounties or other similar ad¬ 
vantages to steamship lines, the Committee did not particularly 
emphasize this phase of the investigation, partly because the subject 
was comprehensively covered in the Annual Report of the Commis¬ 
sioner of Navigation for the year 1909, and partly because the British 
Government recently issued a detailed summary on ^‘Bounties and 
Subsidies in respect of Shipbuilding, Shipping and Navigation in For¬ 
eign Countries.” (Cd. 6899, June 1913). The numerous reports on 
the subject submitted to the Committee by American diplomatic and 
consular representatives have, however, been published in volume 3 of 
the Committee’s Proceedings, and may there be found classified under 
the names of the various countries. 


PREFATORY NOTE. 


7 


Plan and Purpose of the Report. 

The following pages represent the bringing together, in the form 
of a classified summary, of all the essential facts obtained from all 
sources just enumerated. In view, however, of the constant changes 
occurring in the relations between at least some of the hundreds of 
steamship lines involved in the investigation, it should be noted that 
this report presents the facts as they existed at the close of the 
hearings and the receipt by the Committee of the answers to the 
Schedules of Inquiries addressed to the steamship lines, the rail¬ 
roads, and our diplomatic and consular representatives. While 
changes have no doubt taken place since the information was ob¬ 
tained, it is certain that the general situation has not materially 
changed. 

It was considered advisable to divide this report into two parts, 
viz. Part I, dealing with ^‘Steamship Agreements and Afiiliations in 
the American Foreign Trade,” and Part II, relating to ^‘Steamship 
Agreements and Affiliations in the American Domestic Trade.” 
Each part, in turn, has been divided and subdivided in accordance 
with the geographic trade zones of, and trade routes in, our foreign 
and domestic trade. 


S. S. Huebner. 


IH. Res. 425, Sixty-second Congress, second session.) 

In the House of Representatives. 

February 24, 1912, 

Mr. Hardy submitted the following resolution; which was referred to the Committee 

on Rules and ordered to be printed. 

Resolved, That the Committee on the Merchant Marine and Fisheries be, and is 
hereby, •empowered and directed to make a complete and thorough investigation of 
the methods and practices of the various steamship lines, both domestic and foreign, 
engaged in carrying our over-sea or foreign commerce and in the coastwise trade and 
the connection between such steamship lines and railroads; and to investigate whether 
such ship hnes have formed any agreements, conferences, pools, or other combinations 
among each other or with railroads for the purpose of fixing rates and tariffs or of giv¬ 
ing rebates, special rates, or other special privileges or advantages, or for the purpose 
of poohng and dividing their earnings, or for the purpose of preventing or destroying 
competition; also to investigate as to what method, if any, is used by such shipping 
lines, foreign or domestic, and raihoads to prevent the publication of their methods 
and practices in the United States; also to investigate and report to what extent and 
in what manner any foreign nation has subsidized or may own any vessel engaged in 
our foreign commerce; also to investigate and report to what extent any ship lines and 
companies engaged in our foreign or coastwise or inland commerce are owned or con- ‘ 

trolled by railway companies, or by the same interests and persons owning or con- ; 

trolling railroad companies; and said committee shall further investigate whether the j 
conduct or methods or practices of said foreign steamship lines are in contravention 
of our commercial treaties or in violation of our laws, and what effect said methods | 

and practices have on the commerce and freight rates of the United States; and shall j 

further investigate what effect such combinations, agreements, and practices of rail- | 

roads and our coastwise and inland shipping lines or of railroads and over-sea ship¬ 
ping lines, whether domestic or foreign, if any are found to exist, have on the com¬ 
merce and freight rates of the United States, and whether the same are in violation 
of any law of the United States. | 

Sec. 2. That said committee shall report to the House all the facts disclosed by said 
investigation, and what legislation, if any, it deems advisable in relation thereto. 

Sec. 3. That said committee, or any subcommittee thereof, is hereby empowered 
to sit and act during the sessions or during the recess of Congress at such place or 
places as may be found necessary, and to require the attendance of witnesses, the 
production of books, papers, and other documents, by subpoena or otherwise, to swear 
such witnesses and take their testimony orally or in writing. 

Sec. 4. That said committee is hereby authorized to employ such counsel and 
experts and clerical and other assistance as shall be necessary to perform its duties 
hereunder. 

Sec. 5. That the Speaker shall have authority to issue subpoenas for witnesses, 
upon the request of the committee, during the recess of Congress in the same manner 
as during the sessions of Congress. j 

8 







PREFATORY NOTE. 


9 


[H. Res. 687, Sixty-second Congress, second session.] 

In the House of Representatives. 

June 18, 1912. 

Mr. Alexander submitted the following resolution; which was referred to the 

Committee on Rules and ordered to be printed. 

Resolved, That the Committee on the Merchant Marine and Fisheries be, and 
is hereby, empowered and directed to make a complete and thorough investigation 
of the methods and practices of the various ship lines, both domestic and foreign, 
engaged in carrying our over-sea or foreign commerce and in the coastwise and inland 
commerce, and the connection between such ship lines and railroads and other 
common carriers, and between such lines and forwarding, ferry, towing, dock, ware¬ 
house, lighterage, or other terminal companies or firms or transportation agencies, 
and to investigate whether any such ship lines have formed any agreements, under¬ 
standings, working arrangements, conferences, pools, or other combinations among 
one another, or with railroads or other common carriers, or with any of the com¬ 
panies, firms, or transportation agencies referred to in this section, for the purpose 
of fixing rates and tariffs, or of giving and receiving rebates, special rates, or other 
special privileges or advantages, or for the purpose of pooling or dividing their earn¬ 
ings, losses, or traffic, or for the purpose of preventing or destroying competition; 
also to investigate as to what methods, if any, are used by such ship lines, foreign or 
domestic, and railroads and other common carriers, or of any of the companies, 
firms, or other transportation agencies referred to in this section, to prevent the 
publication of their methods, rates, and practices in the United States; also to investi¬ 
gate and report to what exent and in what manner any foreign nation has subsidized 
or may own any vessels engaged in our foreign commerce; also to investigate and 
report to what extent any vessel lines and companies, or any of the companies, firms, 
or transportation agencies referred to in this section, engaged in our foreign or coast¬ 
wise or inland commerce, are owned or controlled by railway companies, by other 
ship lines or companies, or by any of the companies, firms, or transportation agencies 
referred to in this section, or by the same interests and persons owning or controlling 
railroad companies, ship lines, or other common carriers, or any of the companies, 
firms, or transportation agencies referred to in this section; and said committee shall 
further investigate whether the conduct or methods or practices of said foreign steam¬ 
ship lines are in contravention of our commercial treaties, or in violation of our laws, 
and what effect said methods and practices have on the commerce and freight rates 
of the United States; and shall further investigate what effect such combinations, 
agreements, understandings, working arrangements, and practices of railroads and 
our coastwise and inland shipping lines, or of railroads and such shipping lines and 
any of the companies, firms, or transportation agencies referred to in this section, or 
of railroads and over-sea shipping lines, whether domestic or foreign, if any are 
found to exist, have on the commerce and freight rates of the United States, and 
whether the same are in violation of the laws of the United States. 

Sec. 2. That said committee shall report to the House all the facts disclosed by 
said investigation and what legislation, if any, it deems advisable in relation thereto. 

Sec. 3. That said committee, or any subcommittee thereof, is hereby empowered 
to sit and act during the sessions or recess of Congress at such place or places as may 
be found necessary and to require the attendance of witnesses, the production of 
books, papers, rates, tariffs, and other documents bysubpcena or otherwise, to swear 
such witnesses and take their testimony orally or in writing. 

Sec. 4. That said committee is hereby authorized to employ such counsel and 
experts and clerical and other assistance as shall be necessary to perform its duties 
hereunder. 


10 


PREFATORY NOTE. 


Sec. 5. That the Speaker shall have authority to issue subpoenas for witnesses, upon 
the request of the committee, during the recess of Congress in the same manner as 
during the sessions of Congress. 


SCHEDULE OP INQUIRIES SUBMITTED BY THE COMMITTEE ON THE MERCHANT MARINE 
AND FISHERIES TO DOMESTIC WATER CARRIERS (UNDER DATE OP AUG. 21, 1912) IN 
PURSUANCE OP H. RES. 587. 

(The following inquiries were arranged in a schedule of 77 pages. Under each inquiry, 
where necessary, suitably ruled columns were provided to facilitate the classification of the 
information requested. A copy of the schedule may he obtained upon application to the 
Committee.) 

1. (a) State the full name of your company, firm, or line. 

(6) The form of its organization (whether a corporation, partnership, or individ¬ 
ual carrier. 

(c) The dates of its incorporation and establishment. 

(d) The address of its principal office. 

2. If a firm, give the names and addresses of its members, and the names and offi¬ 

cial titles of its managers. 

Instructions for answering questions 3 and 4- 
If there are receivers, trustees, or committees, who are recognized as in the control¬ 
ling management of the line, or of some department of it, give their names, titles, 
and the locations of their offices. Where the duties of an officer are not in accord¬ 
ance with the customary acceptance of his given title, or if the title does not con¬ 
vey the nature of the officer’s duties, state briefly the facts under “Explanatory 
remarks.” 

3. If a corporation, give the names and addresses of the directors. 

4. If a corporation, give the names, titles, and official addresses of its officers and 
the officer to whom correspondence concerning this report should be addressed. 

5. Ix your corporation, firm, or line, at the time of its organization, represented a 

consolidation or merger of any companies, firms, or individual carriers, give 
the names and addresses of all the companies, firms, and individual carriers 
thus consolidated or merged. 

6. Give the names and addresses of aU corporations, firms, or individual carriers 

which your company, firm, or line has acquired, either by purchase, lease, 
or otherwise, since its organization. Give the dates of all such acquisitions. 

7. Give the names of all corporations, any portion of whose common or preferred 

stock, or bonds, short-term notes or other securities, has been acquired by 
purchase, by exchange, or otherwise, by your company, fifm, or line at any 
time since its organization. State the amount of stock, bonds, short-term 
notes and other securities acquired in each company, and the date of acqui¬ 
sition. 

8. If a corporation, state— 

(а) The amount of preferred stock now outstanding. 

(б) The amount of common stock now outstanding. 

(c) The amount of bonds and other Indebtedness now outstanding. 

(Specify the various issues of bonds and notes outstanding and their 
respective amounts and interest rates.) 

9. State the original amount of preferred stock, common stock, bonds, and other 

securities issued at the time of incorporation. 

10. Explain the nature of the voting power attaching to each class of stock in your 

company. If one class of stock possesses a preference in voting power as 
compared with another, state the facts relating to such preference. 








PREFATORY NOTE. - 11 

11. If any voting trust or any other arrangement exists relative to the voting of the 

stock, state the facts of such voting trust or arrangement in detail. 

12. Specify the dividends (rate and amount) paid on each of the various classes 

of stock by your company for each of the last five years. 

13. What were the gross and net earnings of your company for each of the last five 

years? File with the Committee a copy of your latest annual report to 
stockholders. 

14. Give the names and addresses of all corporations and firms owning stocks or 

bonds or other securities in your company. State the classes of securities 
and the amount of each class owned by each such corporation or firm, and 
the date or dates of acquisition. 

15. Give the names and addresses of the 10 individuals (as distinguished from 

corporations and firms) owning the largest amounts of voting securities in 
your company. 

16. If your company, firm, or line is the owner of any stocks or bonds or other 

securities in any railway company or companies, navigation company or 
companies, or any other common carriers, or in any forwarding, ferry, or 
towing company or companies, or dock, warehouse, lighterage, or other 
terminal company or companies, give the names and addresses of all such 
companies, stating the classes and amounts of securities of each such com¬ 
pany owned by your company, and the percentage of the total common or 
preferred stock, or of the bonds or other securities of each such company, the 
holdings of your company represent. 

Instructions for answering question 17. 

By the term “Control” in Question 17 is meant the ability to determine the action 
of a corporation, firm, or line. 

Under the heading “Control, how established,” should be entered the form of 
control exercised, i. e., whether through title to voting securities; any agreement, 
other than through title to securities, to name majority of directors, or the man¬ 
agers, or trustees of the controlling corporation; right to foreclose a first lien upon 
all or a major part of the property of the controlled company, firm, or line; right 
of control in some specific respect only; or right of control by lease or otherwise. 
Also specify all those controlled corporations, firms, or lines which are inactive. 

17. If your company, firm, or line controls, either directly or through any other 

company or firm, any railway company or companies; navigation com¬ 
panies, firms or lines, or any other common carriers, or forwarding, ferry, or 
towing companies or firms; or dock, warehouse, lighterage, or other terminal 
companies or firms; by ownership, by lease, by mortgage, or otherwise, give 
the names and addresses of all the companies and firms thus controlled, 
directly or indirectly, and state the essential terms of the lease showing such 
control, or the character and extent of the control or interest that you have 
in each. 

18. Have any of the companies or firms owned, leased, or otherwise controlled by 

your line, or of whose stock, bonds, other securities, or property you own 
any portion, any interest, directly or through any other company or firm, 
in other navigation companies or firms, or in any of the concerns enumerated 
in questions 16 and 17? If so, give the names and addresses of such com¬ 
panies and firms, and state what interest each has, directly or through any 
other company or firm, in other navigation companies or in any of the con¬ 
cerns enumerated in questions 16 and 17. 

19. Is your company, firm, or line affiliated with any other navigation company 

or companies, or with any of the concerns enumerated in questions 16 
and 17, through agreements, or through any understandings or working 
arrangements, as regards the exchange of traffic or the division of traffic? 


12 


PKEFATORY NOTE. 


If 80 , name all such companies and firms, or lines, and state the terms of 
such agreements or understandings. 

20. Does your company, firm, or line, own or control, by lease or otherwise, 

piers, docks, or other water terminals? If so, give a list of such piers, 
docks, or other water terminals, giving the location of each, and stating 
the terms of the lease showing such control, or the character and extent 
of the control or interest which you have in each. 

21. Has your company, firm, or line leased or chartered vessels from other owners 

during the years 1911 and 1912? If so, give the names and addresses of 
such owners. Also name the vessels, and give the total gross and net 
tonnage represented by the vessels thus leased or chartered from each 
owner during 1911 and 1912. 

22. Has your company, firm, or line leased or chartered any of its vessels to other 

operating agencies during the years 1911 and 1912? If so, give the names 
and addresses of such operating agencies. Also name the vessels, and 
give the total gross and net tonnage represented by the vessels thus leased 
or chartered to each operating agency during each of these years. 

23. Has your company, firm, or line, at present (or if it has not now, has it had 

within the last two years), any agreements, any understandings or work¬ 
ing arrangements, with any other navigation companies, firms, or lines, 
as regards— 

(а) Routes over which vessels shall be operated, 

(б) Time or number of sailings between designated ports, 

(c) Passenger fares or freight rates, and as to the maintenance or change 

of the same, 

(d) Maintenance of service, 

(e) Division of traffic. 

If so, give the names of such companies, firms, or lines; and state in 
connection with each the terms of each agreement or arrangement. 

24. If your company, firm, or line is a member of, or affiliated with, or has any 

understanding with any associations, exchanges, or conferences (whether 
rail, water, or otherwise), give the names and addresses of all such asso¬ 
ciations, exchanges, and conferences, stating the nature of your connection 
or affiliation with each. 

25. File a sworn copy of all port-to-port class and commodity rates now charged 

by your company, firm, or line. Accompany your copy with a statement 
as to when the rates went into effect. 

26. Does each of the rates charged by your company, firm, or line include all 

charges for marine insurance, dockage, wharfage, switching, towing, load¬ 
ing, or unloading, or are certain services like these charged for separately? 
Give the details. 

27. Do any of your vessels operate on season or time contract rates? If so, name 

the vessels and give the rates as last in force. 

28. What arrangements have you with railroads or water lines for through routing 

and division of rates? Specify the railroads and water lines with which 
you have such arrangements, and give the essential terms of each 
arrangement. 

29. Have any railroads refused to prorate with your line? If so, name the rail¬ 

roads and state the facts and circumstances surrounding such refusal. 

30. Are any of the rates charged by your company, firm, or line differential rates 
• under the established railroad rates? If so, state what the differentials are. 

31. Have there been any changes in these differentials during the past five 

years? If so, state what changes have taken place, and the dates of such 
changes. 


PREFATORY NOTE. 


13 


32. Do you encounter competition from other water carriers? If so, state the 

nature of the competition; and, if competing with other regular water lines, 
as distinguished from tramps, give the names of such lines. 

33. Designate the route over which the vessels of your company, firm, or line are 

operated, stating the terminals and other stopping points on the route. If 
you operate several divisions, give the information for each line. If the 
routes differ on the return voyage as compared with the outward voyage, 
state such differences. File with your answer any maps you possess show¬ 
ing the course of the route or routes operated by your line. 

34. Name the vessel lines owned by other companies, firms, or individual car¬ 

riers which connect any of the ports between which your line or its divi¬ 
sions run; and name the ports thus connected by each such vessel line. 

35. Give the names of the vessels (1) which you own and (2) which you operate 

but do not own. Indicate the class of each vessel and give its gross and 
net tonnage. 

36. Specify the 10 principal commodities carried by your line in each direc¬ 

tion (i. e., north and south, east and west) in the approximate order of 
quantity carried. What is the general nature of the balance of freight 
carried by your line? 

37. If your company, firm, or line is owned or controlled by a producing or mer¬ 

cantile company, state whether you carry exclusively for yourselves, or 
whether you also carry for others. State approximately the relative amount 
of freight carried for yourselves and for others. 


SCHEDULE OF INQUIRIES SUBMITTED BY THE COMMITTEE ON THE MERCHANT MARINE 
AND FISHERIES TO STEAMSHIP LINES ENGAGED IN THE AMERICAN FOREIGN TRADE 
(under date of OCTOBER 3, 1912) IN PURSUANCE OF H. RES. 587. 

{The following inquiries were arranged in a schedule of 17 pages. Under each inquiry^ 
where necessary, suitably ruled columns were provided to facilitate the classification of the 
information requested. A copy of the schedule may he obtained upon application to the 
Committee.) 

1 . Is your company, firm, or line, at present (or, if it is not now, has it been within 
the last two years) a party to any agreement or agreements, or any understand¬ 
ings, with any other steamship line or lines as regards either the freight or 
passenger traffic to or from the United States, and with reference to any of 
the following purposes: 

(1) The division of traffic, or a territorial division of routes. 

(2) The discontinuance of service between designated ports by either your 

line, or by the other party to the agreement. 

(3) Meeting the competition of other lines. 

(4) Regulating the time and number of sailings between designated ports. 

(5) The fixing of freight rates, or passenger fares, and the maintenance or 

change of the same. 

(6) The granting of deferred rebates, or other privileges or advantages. 

If so, give the names of all steamship lines with whom you have any agreement 
or understanding, involving any of the above-mentioned purposes, and specify 
the trade route to which each such agreement or understanding applies. Fur¬ 
nish A COPY OF EACH AGREEMENT, IF ANY EXISTS, IN WRITING. 

If any of the agreements or understandings referred to above are not in writing 
state the essential terms as regards any of the above-mentioned purposes which 
may be covered by the agreement or understanding. 



14 


PKEFATOEY NOTE. 


2 . Is your company or line a member of, or has it any agreements or understandings 

with, any steamship conferences or pools as regards either the freight or passen¬ 
ger traffic to or from the United States? If so, (1) name each conference or 
pool of which your company or line is a member, or with which it has an agree¬ 
ment or understanding; (2) give the name and business address of the secre¬ 
tary, or corresponding officer, of each conference or pool; and (3) furnish a 
copy of the conference or pool agreement. 

3. Has your company or line any traffic arrangement or any understanding with any 

railroad or railroads in the United States as regards the freight traffic to or from 
the United States, and with reference to any of the following purposes: 

(1) The establishment of a service between designated ports. 

(2) Through routing arrangements. 

(3) The division of traffic, or a territorial division of routes. 

(4) The provision for an exclusive working arrangement between the railroad 

and the steamship line in matters of water transportation. ‘ 

(5) Mutual assistance in obtaining traffic. I 

(6) Meeting the competition of other lines. j 

(7) Regulating the time and number of sailings between designated ports. \ 

(8) The fixing, maintenance, or division of joint rates. 

If so, name each railroad with whom you have any agreement or understand¬ 
ing referring to any of the above-mentioned purposes. Furnish a copy 
OF EACH AGREEMENT IF IT EXISTS IN WRITING. If any of the above- 
mentioned agreements or understandings are not in writing, state the essential 
terms of each as regards any of the above-mentioned purposes. 

4. Specify the route (to and / or from the United States) over which the vessels of J 

your company or line are operated, stating the terminals and other stopping | 

points on the route. If you operate several lines to and / or from the United I 

States, give the information for each line. As regards each route, give the | 

names of the steamers which you operate, and indicate the gross and net tonnage [ 

of each. [ 

5. Send a copy of the freight rates now charged by your company or line (1) from the { 

United States to the foreign ports reached by your line, and (2) from such for- J 

eign ports to the United States. If you operate several lines to and / or from the t 

United States, the rates now charged by each line should be furnished. [ 

(If you have already filed any of the above-mentioned rates with the Com- ( 
mittee, they need not be sent again.) » 

} 

- I 

t 

SCHEDULE OF INQUIRIES SUBMITTED BY THE COMMITTEE ON THE MERCHANT MARINE 
AND FISHERIES TO AMERICAN RAILROADS (UNDER DATE OP SEPTEMBER 16, 1912) 

IN PURSUANCE OF H. RES. 587. 

(The following inquiries were arranged in a schedule of 2S pages. Under each inquiry, 
where necessary, suitably ruled columns were provided to facilitate the classification of the 
information requested. A copy of the schedule may he obtained upon application to the ' 
Committee.) 

1 . Give the names of all water transportation companies, any portion of whose com¬ 

mon or preferred stock, or bonds or other securities, are owned by your company. •' 
State the amount of stock and other securities owned in each company, and the 
date of acquisition. 

2 . Give the names and addresses of all water carriers (whether corporations, firms, or 

individual carriers) in which your company has obtained any interest by own¬ 
ership, mortgage, lease, or agreement, or in consequence of advances, or other- 





PKEFATORY NOTE. 15 

wise. The answer to this question does not require a repetition of the infor¬ 
mation called for in Question 1. 

3. If your company is the owner of any stocks, bonds, or other securities in any for¬ 

warding, towing, dock, warehouse, lighterage, or canal company or companies, 
give the names and addresses of all such companies, stating the classes and 
amounts of securities of each such company owned by your company, and the 
percentage of the total common stock, preferred stock, bonds, and other securi¬ 
ties of each such company the holdings of your company represent. 

4. Give the names and addresses of all forwarding, towing, dock, warehouse and lighter¬ 

age concerns (whether corporations, firms, or otherwise) in which your company 
has obtained any interest by ownership, mortgage, lease, or agreement, or in 
consequence of advances, or otherwise. The answer to this question does not 
require a repetition of the information called for in Question 3. 

5. Have any of the water carriers, or any of the companies and firms enumerated in 

Questions 3 and 4, which are owned, leased, or otherwise controllfed by your 
company, or in which your company has any interest by ownership, mortgage, 
lease, agreement, advances, or otherwise, any interest, directly or through an 
intermediary, in any navigation companies or firms, or in any of the concerns 
enumerated in Questions 3 and 4? If so, give the names and addresses of such 
companies and firms and state what interest each has, directly or through an 
intermediary, in other navigation companies, or in any of the concerns enu¬ 
merated in Questions 3 and 4. 

6. Give the names of the vessels, if any, (1) which are owned and operated (i. e., 

which are not owned by separately incorporated companies) by your company 
or its subsidiaries; (2) which are owned by your company or its subsidiaries, but 
which are operated by other companies or firms; and (3) which are operated by 
your company or its subsidiaries, but which are owned by other companies or 
firms. As regards the vessels embraced in groups (2) and (3), give the names 
and addresses of the companies and firms which operate your vessels, or whose 
vessels you operate, as the case may be. 

7. Has your company any traffic agreements, or any understandings or working 

arrangements, with any water transportation lines, either domestic or foreign, 
as regards any of the following: 

(1) The establishment of a service between designated ports. 

(2) Through routing arrangements. 

(3) The division of traffic, or a territorial division of routes. 

(4) The provision for an exclusive working arrangement between the railroad 

and the ship line in matters of water transportation. 

(5) Mutual assistance in obtaining traffic. 

(6) Meeting the competition of other lines. 

(7) The time and number of sailings between designated ports. 

(8) The fixing, maintenance, and division of joint rates. 

If BO, give the names of such navigation companies, firms, or lines. Furnish a copy 
OF EACH AGREEMENT, IF IT EXISTS IN WRITING. If any of the agreements or under¬ 
standings, referred to above, have not been reduced to writing, state the essential 
terms of such agreements or understandings. 


16 


PKEFATORY NOTE. 


[Department Circular No. 123. Special instruction. Consular.] 

METHODS AND PRACTICES OP STEAMSHIP LINES ENGAGED IN THE FOREIGN CARRYING 

TRADE OF THE UNITED STATES. 

Department of State, 

Washington, April 17, 1912. 

To certain American diplomatic and consular officers in Europe, South America, and 
the Far East. 

Gentlemen: At the request of the Hon. Joshua W. Alexander, chairman of the 
Committee on the Merchant Marine and Fisheries of the House of Representatives, 
and in response to the requirements of a resolution introduced in the House of Repre¬ 
sentatives on February 24, 1912, a copy of which is reproduced on the overleaf here¬ 
with, you are instructed to prepare and transmit a report, in duplicate, on the methods 
and practices of various steamship lines engaged in carrying the foreign commerce of 
the United States. It is desired that your report shall include complete and satis¬ 
factory answers, so far as practicable, to the following interrogatories: 

1. Ascertain and report whether any steamship lines running to the ports of the 

country of your official residence have formed agreements, conferences, pools, 
or other combinations with each other or with the railroads of the coimtry for 
the purpose of fixing rates and tariffs, or of giving rebates, special rates, or other 
special privileges or advantages, or for the purpose of pooling and dividing 
their earnings, or for the purpose of preventing or destroying competition; or 
whether steamship lines and railroads have agreements, or understandings, or 
practices by which a different and more favorable through rate is given when 
shipment is made thereunder from the through rate on shipments not made in 
conformity thereto. If obtainable, furnish copies of such agreement, or of any 
rule, regulation, or directions showing such practices to exist. 

2. Describe the method, if any, used by such shipping lines and the railroads to 

prevent the publication of their methods and practices in the United States; and 
whether under any law, rule, regulation, or custom any favors are shown to any 
ships or ship lines, whether in the way of shipbuilding bounties, subventions or 
bounties, or otherwise are granted to such ships or ship lines which would give 
them any advantage in competition with ships or ship lines, and furnish copy. 

3. To what extent and in what manner has the country of your official residence sub¬ 

sidized and may own vessels engaged in the foreign commerce of the United 
States? 

4. Report any instances known to you where steamship lines and companies engaged 

in the foreign commerce of the United States are owned or controlled by railway 
companies, or by the same interests owning or controlling railway companies. 

5. Report whether the conduct or practices of foreign steamship lines in any of the 

particulars mentioned, if found to exist, appear to be in contravention of the 
commercial treaties of the United States, or in violation of the laws of the United 
States, and what is their effect on the commerce and freight mtes of the United 
States. 

6 . Describe the effect such combinations, agreements, and practices of railroads and 

oversea shipping lines, if found to exist, have on the commerce and freight rates 
of the United States. 

In order to avoid duplication in the reports by the diplomatic and consular officers 
in the same country the consuls whose names are subjoined are instructed to cor¬ 
respond with the diplomatic officer in the country before preparing their reports. 
Question 3 is preeminently one for the diplomatic officers. The other questions may 
be answered both by the consuls at the seaports and the diplomatic officer at the 
capital. 


PREFATORY NOTE. 


17 


The committee desires to have this information before it before the end of the present 
session of Congress. The report should therefore be prosecuted with all due diligence 
consistent with accuracy of statement and a reasonable measure of comprehensiveness. 
I am, gentlemen, 

Your obedient servant, Huntington Wilson, 

Acting Secretary of State. 


CIRCULAR MTTER OF FEBRUARY 18, 1913, RELATING TO THE ADVANTAGES AND DIS¬ 
ADVANTAGES OF STEAMSHIP AGREEMENTS AND CONFERENCES, ADDRESSED BY THE 

COMMITTEE ON THE MERCHANT MARINE AND FISHERIES TO EXPORTING AND IMPORTING 

FIRMS OF THE COUNTRY. 

February 18, 1913. 

Dear Sirs: At the recent public hearings before the Committee on the Merchant 
Marine and Fisheries (conducted in pursuance of H. Res. 587) a large number of repre¬ 
sentatives of steamship lines engaged in the American foreign trade have frankly 
admitted the existence in this trade of written agreements or friendly understandings 
between the established lines operating in their respective trades for the fixing and 
maintenance of uniform rates, and not infrequently for the purpose of pooling their 
business or holding their traffic by means of a rebate system. Considered in its entirety, 
the testimony shows that, as regards nearly every foreign-trade area, all the established 
lines operating to and from American ports are working in harmonious cooperation, 
either through written agreements, conference arrangements, or gentlemen’s under¬ 
standings. 

Practically all these steamship representatives have asserted that such agreements 
or arrangements are a natural evolution, and are necessary for doing the business and 
giving to the shippers an ample tonnage and an efficient, frequent, and regular service 
at reasonable rates. Such agreements, they contend, are a protection to the shipper 
as well as the shipowner. To the shipper they insure desired stability of rates and 
the elimination of secret arrangements with competitors. To the shipowner they tend 
to give a dependable return on the investment, thus enabling the lines to provide new 
facilities for the development of the trade. Such agreements, it was also argued, fur¬ 
nished the means for taking care of the disabilities of the weaker lines, whereas unre¬ 
stricted competition, based on the survival of the fittest, tends to restrict the develop¬ 
ment of the lines and in the end must result in monopoly. 

Moreover, with reference to the practices of steamship lines, judged from the stand¬ 
point of the shipper, the representatives of the conference lines testified as follows: 

(1) That the tonnage and facilities are ample. 

(2) That the rates are reasonable. 

(3) That the rates and service are such as not to operate prejudicially to our com¬ 
merce as compared with foreign competitive markets. 

(4) That shippers are treated alike, and that special privileges and advantages are 
not given to some and denied to others. 

The foregoing constitutes a brief summary of the essential contentions of the repre¬ 
sentatives of the conference lines. It is now the purpose of the committee to ascertain 
as far as possible the extent to which these contentions are indorsed by the patrons of 
the lines or to what extent exception is taken to the same. With this purpose in view, 
the committee respectfully requests you to make a frank statement of your views and 
experiences (with respect to the foregoing) in the several trades in which you are 
engaged, either as exporter or importer, with the distinct understanding that your 
communication will be considered confidential. Moreover, if you have in mind any 
suggestions which you feel the committee should take under advisement in formu¬ 
lating its recommendations to Congress for proposed legislation, I shall be pleased to 
have you state the same. 

Very truly, yours, J. W. Alexander, 

Chairman. 


25055°— VOL 4—14 - 2 





PART I. 


Steamship Agreements and Affiliations in the 

American Foreign Trade. 


19 








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CHAPTER I. 


PASSENGER AGREEMENTS IN THE AMERICAN-ETJROPEAN 

TRAFFIC. 


Extent and Nature of the Passenger Traffic. 


The most noticeable feature of the North Atlantic traffic between 
the United States and Europe is the dominant importance of the 
passenger business, and especially the steerage traffic. As stated in 
the report of the New York Committee of steamship representatives 
(vol. 2, p. 1358)— 

The increasing passenger traffic, not only of Americans visiting Europe but 
of Europeans coming to this country, has enabled these most costly instruments 
of modern transportation to ply the Atlantic throughout the whole year. The 
steadily increasing immigration, together with the patronage of those who 
wish to revisit their homes abroad, furnishes a steady steerage traffic which 
demands and receives the most painstaking attention of the lines. It is the 
very lifeblood of the business, so far as these superior boats are concerned, with¬ 
out which their existence and further operation would become impossible. 

For the year 1912 the aggregate number of passengers arriving at 
and departing from all the North Atlantic ports of the United 
States and Canada totaled 2,165,600. Out of the 1,462,700 passengers 
figuring in the westbound movement to the Atlantic ports no fewer 
than 1,066,345 were landed at the port of New York. A classification 
of the passengers, both westbound and eastbound, also shows that 
the third-class passenger business comprised over 71 per cent of the 
total, the respective number of passengers for each class of service 
being indicated in the following table: 


WESTBOUND. 


EASTBOUND. 


First class_ 
Second class 
Third class.. 


106,000 
293, 500 
1 , 063, 200 


First class—, 
Second class 
Third class. 


101, 300 
125, 600 
476,000 


Total 


2,165, 600 


In the westbound traffic during 1912 it also appears that 15 lines, 
representing the North Atlantic and Mediterranean services, each 

bringing in passengers to the number of 20,000 and upward, carried 

21 












22 PASSENGER AGREEMENTS IN THE AMERICAN-EUROPEAN TRAFFIC. 

897,000 passengers, or nearly two-thirds of the total. Considering 
the most important companies, according to their cooperation or 
affiliations, it appears that four groups of lines carried 723,768 pas¬ 
sengers, or approximately one-half of the total number, in the west¬ 
bound movement. These groups are the following: 



Total trips. 

Passengers. 

German—North German Lloyd, Hamburg-American, and Holland American 
Lines . .. .■ . 

268 

358,287 

International Mercantile Marine—White Star, Red Star, American, and Atlantic 
Transport... 

222 

165,405 

Cnnard anfi Anchor ... 

160 

146,497 

Ttalien lines—Naviga.ziona (renerale Ttalia.naj Veloee, and Italia only_ 

37 

53,579 


Total...... ......... 

677 

723.768 





The General Nature and Purpose of Passenger Agreements. 

The foregoing figures show that by far the largest share of the 
North Atlantic passenger traffic in both directions is carried by a 
comparatively small number of the important lines. From the stand¬ 
point of control, however, it is significant that all the lines already 
referred to, as well as many others, have entered into a series of agree¬ 
ments which cover all classes of the North Atlantic passenger busi¬ 
ness and which embrace all of the well-known lines operating to and 
from British, North Continental, and Mediterranean ports. The ac¬ 
companying chart shows that over 28 trans-Atlantic lines have within 
recent years been affiliated in their respective spheres, as regards their | 
passenger business, through membership in four conferences and by j 
virtue of at least 12 agreements. In fact, the testimony in the suit | 
of The United States v, the Hamburg-American Line et al. would 
seem to indicate that only a few lines of lesser importance, such as the 
Uranium Line and the two Greek lines (recently merged into one), 
are outside of the conference arrangements. Certainly, when there is 
added to the statistics of the lines already referred to in the first sec¬ 
tion of this chapter, all of which belong to the conferences, the pas¬ 
senger traffic of the other lines indicated in the accompanying chart., 
it is clear that only a very small percentage of the total passenger , 
trade between Europe and America is carried by lines which are not I 
parties to agreements and conferences for the regulation of the traffic, j 
A closer examination of the chart (the several agreements will be j 
discussed later) will show that each group of lines representing the 

















CO 

El 

Jc; 

M 

IS 

W 

W 

pi 

-A 

< 

E-* 

w 

iz; 

M 

E^ 

w 

O 

o 

V 

6 H 

Od 

o 

12; 


ACSEEMENT RESPECTING ANTWERP 
(The two lines iiave entered into 
a differential freight rate 
agreement respecting the port of 
Antwerp.1 


AGREEMENT RESPECTING HAMBURG AND 
BRENCEN. By agreement Hamhurg is re¬ 
served for Kamhnrg American and 
Bremen for North Connan Lloyd..as 
regards sailings from all American 
ports north of Savannah. 


AGREEMENT RESPECTING ANTWERP AND 
ROTTERDAM. (Indicated lines have an 
understanding that they will reserve 
Rotterdam for the' Holland American, 
and Antwerp for the Red Star, on the 
wesfboand voyage to America.) 


N. D. I. V. WESTBOUND FREIGHT 
AGREEMENT 


N. D. 1. V. PASSENGER AGREEMENT 

(Articles 15 and 17 reserve to each 
of the indicated lines certain 
ports. Doth outward and inward, as 
jegayds the American freight traf- 


AGREEMENT G 


Concluded 
the Corapa 

port^of Havre’to, fhe'Frehch line 
as regards rreigbt and passengers. 


N.D.i.V, and 
Transatlan- 
serves the 


AGREEMENT N 

(Concluded "between the N.D.L.V, and 
the Austro-Americana. Article 15 
anportions territory between the 
contracting parties as regards the 
American freight traffic.) 


AGREEMENT PJISPEGTING ROTTERDAM 
(The two indicated lines have enter 
ed into an agreement for the main¬ 
tenance of freight rates at the 
port of Rotterdam.) 


w 

W| 

SI 

wl 

wl 

“! 

I 

oi 

mI 

hI 

,1 




NORTHERN INTERNATIONAL TRANSOCEANIC 
TRAFFIC ASSOCIATION. (Regulates 
traffic from northern Russia to. 


___ rflernfSurope and TfaSS 
ports. ^Besidet direcj Ti-.,-, .. 

kll%s I? tlL™ 



PHILADELPHIA TRANSATLANTIC XINE 

WILSON and FURNESS-LEYLAND LINE 

THOMSON LINE 


FURNESS LINE 


LEYLAND LINE 


CHESAPEAKE & OHIO S.S. CO. LINES 


WARREN LINE 


■JOHNSTON LINE 


AMERICAN LINE 



CANADIM PACIFIC RAiLWA"ir COMPANY 

ATLANTIC STBAMSHIP SERVICES 


WHITE STAR-DOMINION LINE 


DONAIDSOH LINE 


ANCHOR LINE 


WHITE STAR LINE 


GUNARD LINE 


ATLANTIC TRANSPORT LINE 


MANCHESTER LINERS 


LAMPORT and HOLT LINE 


MOSS LINE 


PAPPAYANNI LINE 


ELLERMAN LINE 


PHOENIX LINE 


NORTH GERMAN LL0"n) 


HAMBURG AMERICAN LINE 


HOLLAND AMERICAN LINE 


RED STAR LINE 


COMPAGNIE GENERAIE TRAHSATLANTIQUE 


AUSTRO-AMEPJCANA 


RUSSIAN EAST ASIATIC S. S, CO. 




AGREEMENT RESPECTING NORWEG- 

BALTIC POOL 


IAN PORTS. (Reported that 

(This pool governs both the east- 
bound and westbound traffic, as 
regards the Baltic ports.) 


indicated lines are contem¬ 
plating the conclusion of an 
agreement) 




COMPANIA TRANSATLANTICA DE BARCELONA 


PINILLOS LINE 


NORWAY-MEXICO GULF LINE 


SWEDISH-AMERICAN MEXICO LINE 




TRANSATLANTIC FREIGHT CONFERENCE 

(The indicated Conferences are sections 
of this Conference. Mr. S.E. Morse, 
Secretary of this Conference, is also 
Secretary of the American Atlantic Con¬ 
ference .) 


LONDON CONFERENCE 

(For the establishment of easfbound 
mini'mum rates. There is also a 
Qonference for the fixing of .min¬ 
imum rates westbound from London.) 


LIVERPOOL CONFERENCE 
(For the establishment of eastbound. 
minimum rates. There is also a 
Conference for the fixing of rain- 
Imum rates wes:|^j^gyjid from liver- 


GLASGOW CONFERENCE 
(For the establishment of eastbound 
minimum rates. There is also a 
Conference for the fixing of min¬ 
imum rates westbound from Glasgow.) 



, MANCHESTER CONFERENCE 
(For the establishment of eastbound 
minimum rates. There is also a 
Conference for the fixing of min¬ 
imum rates westbound from Man¬ 
chester. 7 


ATLANTIC COIIPERENCE 
(Consists of British as well as Cont¬ 
inental lines, and has the same Secre¬ 
tary as the N. D. L. V.) 


AGREEMENT RESPECTING CHANNEL PORTS 
(The indicated lines are reported to have 
entered into a minimum rate agreement 
covering the traffic from the Channel 
ports to the United States.) 


w 

fei 

P 

tri 








MFDITERRANEAN WESTBOUND FREIGHT AGREEMENT 
(Indicated lines have also an understand- 
as to minimum rates EASTBOUND to 
Mediterranean. The lines are or¬ 
ganized in the so-called MEDITERRANEAN 
CONFERENCE) 


AGREEMENT RESPECTING AUSTRIA 
(Indicated lines have agreed upon a min¬ 
imum freight tariff from Austrian 
Adriatic ports to the United States.) 


AGREEMENT RESPECTINa THE LEVANT. (These 
lines.have entered Into^an agreement re¬ 
specting freight rates from the Levant 
to America, with transshipment at Liver- 
poor. Reportea that tnere.is a rate^ 
agreement between all the lines aocept- 
ing goods at New .YorK.. with the except- 
M tue Pafcre ana^Greek ^mes. t 


« 

I 

I 

* ^1 

t wl 

Itu I 
IW I 

I IN 

I > 

1 

t 


House Ooc. No.^05 ; 63d Cong., 2d Sess. 








































































































































































































PASSENGER AGREEMENTS IN THE AMERICAN-EUROPEAN TRAFFIC. 23 

respective sections of Europe is governed by an agreement, and that 
where several trade routes adjoin or intersect one another the several 
conferences or groups of lines have entered into agreements with 
each other, so that practically the entire traffic is being operated by 
the great majority of the lines on the basis of established rules and in 
the spirit of harmony. 

In the first and second class passenger business the primary pur¬ 
pose of these agreements, leaving out of account the working of the 
details, is to establish minimum rates for each steamer of the several 
lines in the agreement, depending upon the type of vessel and the 
trade in which it is operating. Judging from the agreements, the 
business is not pooled, and each steamer may charge more than the 
agreed minimum, depending upon the facilities offered to the passen¬ 
gers. As regards the steerage business, however, which in 1912 com¬ 
prised over 70 per cent of the total traffic, the agreements are pooling 
arrangements, which, it is claimed by the steamship lines’ representa¬ 
tives, were found necessary in order to preserve the smaller lines 
against annihilation and give every line a fair division of the traffic. 

The steerage agreements allot to each line a certain percentage of 
the total traffic moving via certain ports, and operate on the plan that 
if one of the lines finds itself carrying far in excess of what it knows 
is its allotted percentage, it must temporarily raise its rates, thus 
automatically throwing the excess business coming to itself to some 
other line which is falling short of its share of the total traffic. As 
soon as the line raises its rates it advises the Secretary of the confer¬ 
ence of the raise, who at once communicates the fact to all the other 
lines. The several lines also obligate themselves to furnish weekly 
traffic statistics to the Secretary of the conference, who keeps account 
of the same for all lines and furnishes the results to all the members 
of the conference. In this way every line knows from time to time 
the relative standing of the other lines, as far as their share of the 
total traffic is concerned. In case any line exceeding its allotted share 
should not seek to divert traffic from itself by raising rates, it may be 
compelled to do so by conference action. 

Mr. P. A. S. Franklin, vice president of the International Mercan¬ 
tile Marine Co., in his testimony before the Committee (vol. 1, p. 582) 
emphasized the fact that no line is permitted to reduce its rate below 
a certain minimum in order to obtain its stipulated share of the 
business, and that the spirit of the agreement is not to reduce rates. 


24 PASSENGER AGREEMENTS IN THE AMERICAN-EUROPEAN TRAFFIC. 

but instead to have any line, exceeding its share, advance its rates 
with a view to letting the other lines take the business. Moreover, 
if at the end of certain periods the accounts show that some lines 
carried in excess of their allotted portion, the agreements compel 
them to pay into a pool a certain sum per excess passenger for the 
benefit of the lines which carried less than their proportion. It 
therefore follows that a line, exceeding its proportion, might as well 
force the business to the other lines by raising its rates instead of 
carrying the business and paying back the money into the pool. It 
also follows that it is not to the interest of any line to cut rates 
below the minimum, because, according to the pooling arrangement, if 
it is not obtaining its share of the business, it is nevertheless getting 
its share of the money. On the other hand, there is no incentive for 
any line to acquire more than its share of the traffic, because, as Mr. 
Franklin testified, “the line which is getting an excess of business is 
putting out more money and effort and is using that capital and 
obtaining no return on it.” 

Thus it is seen that the steerage agreements have been so arranged 
that the various lines will find it to their interest to carry exactly 
those proportions of the traffic which they considered a fair division 
and which they bargained to give each other. To do otherwise, it is 
argued, would mean that the line which brings new ships into the 
trade would have them filled all the time, and that the lines with 
the most powerful financial backing would acquire much more than 
tlieir fair share of the trade, thus bringing the situation to a question 
of the survival of the fittest. It has been ably argued before the 
Committee by Mr. Franklin and others that it has always been their 
experience that it is most difficult for each of a large number of 
lines operating under different conditions and from numerous com¬ 
peting ports and running different types of vessels—some old and 
some new—to maintain a fair percentage of the business unless they 
agree to combine and limit their actions. The concensus of the testi¬ 
mony before the Committee has been to the effect that the only prac¬ 
ticable method of securing a fair share of business for all the lines, ^ 

thus preserving the weaker ones, and of substituting harmony in place [ 

of discord and cutthroat competition, is through some form of pool- j 
ing as just described, and that the primary purpose of such pooling j 
agreements is to maintain a reasonable price and prevent the line or j 




PASSENGER AGREEMENTS IN THE AMERICAN-EUROPEAN TRAFFIC. 25 

lines with unlimited capital for development from ultimately acquir¬ 
ing the whole business. 

It should also be noted that the steerage traffic agreements are in 
the nature of bargains between the lines, usually made for a few 
years only, and thereafter to continue from year to year unless dis¬ 
continued. The agreements, in other words, are not made forever, 
and this fact is important in relation to the oft-repeated assertion 
that such agreements eliminate all competition, or furnish no in¬ 
ducement for certain lines to obtain their share of the business. 
Minimum rates, it is true, are established in all the trades; but it is 
also true that if a line demonstrates over a period of years that it 
can not carry its percentage of the traffic, it may, at the next revision 
of the agreement, 5 or 10 years later, be unable to prevent a 
reduction in its allotted percentage of the trade. From the stand¬ 
point of future bargaining, therefore, it is every line’s desire to carry 
its full percentage of the business and to demonstrate that it is 
entitled to its allotted share. As a result there is always very keen 
competition between the lines in the solicitation of business in order 
to maintain their percentages. 

Classification of Passenger Agreements. 

None of the lines complied with the Committee’s request for copies 
of all the passenger agreements to which it is a party. In their com¬ 
munications to the Committee most of the lines admit that they are 
parties to certain minimum-rate agreements covering first and second 
class business, and a more comprehensive agreement concerning the 
steerage traffic, and that it is their understanding that a copy of each 
agreement is in the possession of the district attorney for the southern 
district of New York, in connection with the Government’s suit 
against the Hamburg-American Line et al. under the Sherman Anti¬ 
trust Act. It appears that 11 such agreements were obtained by the 
Government, and through the courtesy of the Department of Justice 
the Committee has obtained copies of the same. . 

An examination of these agreements shows that they divide 
themselves into three main classes, viz, (1) The N. D. L. V. and 
affiliated agreements, (2) the group of agreements governing the 
passenger traffic from the ports of the United Kingdom and north 
Europe, and (3) the Mediterranean passenger agreements. It will be 


26 PASSENGER AGREEMENTS IN THE AMERICAN-EUROPEAN TRAFFIC. 

the purpose in the following pages to abstract the more important 
provisions of these agreements as they were presented to the Com¬ 
mittee. As qualifying this abstract, however, it should be stated that 
these agreements are subject to constant changes and are frequently 
modified by resolutions adopted by the lines meeting in conference. 

It therefore follows that changes may have taken place without the 
Committee having knowledge of the same, as regards the percentage 
allotment of traffic between the lines, the admission or withdrawal of 
companies, the abandonment of old, and the negotiation of new con¬ 
tracts with individual lines as well as in the working details speci¬ 
fied in the agreements submitted to the Committee. 

N. D. L. V. and Affiliated Passenger Agreements. 

1. The N. D, L. V. agreement^ or the agreement governing the 
Nord-Atlantischer Dampfer Linien Yerhand (North Atlantic Steam^ 
ship Lines Association). —This contract was concluded at Hamburg 
January 19, 1892, and according to its terms, continues from year to 
year, unless notice to terminate is given. The steamship companies 
which are parties to this agreement are the Hamburg-American Line, 
the Holland-American Line, the North German Lloyd, and the Red 
Star Line. The contents of the leading provisions of this agreement 
(the Committee has definite knowledge that the agreement was re¬ 
newed as lately as 1909), may be briefly summarized as follows: 

(1) The lines guarantee to each other the percental participation 
as defined and provided for in articles 3 to 8 of the contract as re¬ 
gards the total number of steerage passengers forwarded by them in 
the course of the year to and via the United States and Canada, so 
far as this transportation takes places from a port of the European 
Continent north of Cadiz (including Cadiz), or from a port of Great 
Britain and Ireland. Article 3 of the agreement provides that the 
proportions in which the lines participate in the total transportation i 
of steeragers (subject to alteration, which may be effected in accord¬ 
ance with other sections of the contract) be fixed as follows: 

The North German Lloyd, 39.7 per cent. 

The Hamburg-American Line, 24.8 per cent. 

The Red Star Line, 13.5 per cent. 

The Holland-American Line, 8 per cent. 

For the British lines, 14 per cent is set apart. 



PASSENGER AGREEMENTS IN THE AMERICAN-EUROPEAN TRAFFIC. 27 

As stated, the foregoing percentages are subject to change, and 
by resolution in 1909, it should be explained, the westbound portions 
of the parties were fixed as follows: 

The Hamburg-American Line, 31.38 per cent. 

The Holland-American Line, 10.61 per cent. 

The North German Lloyd, 42.46 per cent. 

The Red Star Line, 15.55 per cent. 

(2) Each line agrees to arrange its service in such a manner that 
the number of steeragers actually carried corresponds as nearly as 
possible with the number allotted to it by the contract. All the lines 
agree to furnish a statement of steerage and second-cabin passengers 
carried, three times a month, and also the tonnage engaged and the 
destination of steamers. The Secretary must then prepare accounts 
monthly, so as to clearly show at all times the position in which the 
lines stand to each other with regard to the tonnage employed by 
them in the course of the year. For every increase of 1,000 tons each 
line will be allowed a certain number of steeragers, such number to 
be equal to the number of steeragers resulting for each 1,000 tons of 
the total tonnage employed in the current year by all the lines. The 
increase in tonnage is to be counted for 70 per cent, and the decrease 
in tonnage is also to be counted for 70 per cent, if the tonnage does 
not decrease more than 10 per cent. 

(3) Any line whose steerage passengers in a year exceed in point 
of number the proportion fixed must pay a compensation price of 
60 marks for each passenger carried in excess of the established pro¬ 
portion, this compensation money to be paid to the line or lines 
which have not reached their participation quota, and in the propor¬ 
tion that each line is short. This provision is the chief deterrent to 
the lilies to exceed their proportion, and the compensation price was 
fixed at 60 marks. The compensation price may be changed by 
majority action of the Board of Presidents. Compensation accounts 
must be rendered each year by the Board of Secretaries, and must 
be paid by the lines within 14 days. 

(4) All lines agree that their vessels in the trade with the United 
States and Canada shall not call either outward or inward at any 
home or adjacent port from or to which the vessels of any of the 
other lines are already sailing. In case any of the British lines run 
boats with steeragers from a Continental contract port any of the 


28 PASSENGER AGREEMENTS IN THE AMERICAN-EUROPEAN TRAFFIC. 

Continental lines shall have the right to call at any British port for 
steeragers. Article 31 provides that— 

By the words “ in the trade ” it is understood amongst the Continental lines: 
Passengers, mail, and freight. As home or adjacent ports appertaining to each 
line in the sense of the contract are to be considered the following ports: 

In the case of the Norddeutscher Lloyd, Bremen and all the ports of the 
Weser. 

In the case of the Hamburg-American Line, Hamburg, Cuxhaven, and all 
other ports of the entire Elbe, Stettin, and all ports of the Oder, and Havre. 

In the case of the Red Star Line, Antwerp, the ports of the Schelde, Flushing 
and Terneuzen included, and the entire coast of Belgium. 

In the case of the Rotterdam Line, the entire coast of Holland, Flushing and 
Terneuzen included, and Boulogne-sur-Mer. 

It is understood that the English Channel ports are open to the Continental 
lines except for steerage passengers, as defined in the British passenger act. 

(5) In case the results of any given line show too large or too 
small a proportion of business, such line is entitled and in duty bound 
to adopt measures calculated to bring about a correct adjustment. 
It must inform the Secretary of the measures proposed, and the Board 
of Secretaries may direct other more forcible measures, which, how¬ 
ever, can only refer to rates and commissions. The lines must then 
put such measures in force without delay or demur. 

(6) No line has the right to alter its steerage and second-cabin 
rates without previously informing the Secretary. The Board of 
Secretaries can not compel any line to fix its gross rates for adult 
steerage passengers at less than 100 marks, unless with the consent 
of the Board of Presidents. The lines agree to commence with defi¬ 
nitely fixed steerage rates, all of which are stipulated in the contract. 
The lowest cabin rate must be at least 50 per cent higher than its 
steerage rate and 30 per cent higher than the highest steerage rate 
of any of the other lines. 

2. Agreement L. —^The lines party to this agreement are the N. D. 
L. V. Lines, the Compagnie Generate Transatlantique, and the Amer¬ 
ican Line. It covers the “ eastbound pool,” embracing: 

(1) All eastbound steerage passengers of the N. D. L. V. 

(2) All eastbound steerage passengers of the Compagnie Gen¬ 

erate Transatlantique, who, however, have to be consid¬ 
ered in two different groups, i. e. {a) Italian and Oriental 
passengers, and {h) Continental passengers. 

(3) All Italian and Oriental eastbound steerage passengers for¬ 

warded by the American Line. 


PASSENGER AGREEMENTS IN THE AMERICAN-EUROPEAN TRAFFIC. 29 

This contract was entered into for a period of one year beginning 
January, 1904, and is to continue from year to year. As regards the 
above-named business, the N. D. L. V. Lines guarantee to each of the 
other two lines a certain proportion, and a compensation price of a 
certain sum per passenger must be paid by each to the other in case 
the designated proportion is exceeded. The parties to the agreement 
obligate themselves to furnish the Secretary of the N. D. L. V. weekly 
statistics which will enable him to ascertain the position of the dif¬ 
ferent lines in this eastbound pool. All the parties also agree that 
any dispute arising out of any alleged breach of the agreement shall 
be settled by arbitration and the arbitrator of the N. D. L. V. shall 
act in the case. 

3. Agreement G .—This agreement, commencing January, 1903, and 
continuing thereafter from six months to six months, was entered 
into between the N. D. L. V. Lines, on the one hand, and the Com- 
pagnie Generale Transatlantique, on the other. According to its 
terms, the lines divide amongst themselves their entire third-class 
passenger traffic from ports between Cronstadt and Bordeaux, both 
included, to ports in the United States and Canada. The apportion¬ 
ment was arrived at on the basis of the total number of third-class 
passengers carried by the lines to the United States and Canada dur¬ 
ing the years 1900 to 1902, inclusive, and the two parties agree to 
compensate each other (at a certain stipulated sum per excess pas¬ 
senger) in case either should exceed its proportion. To facilitate the 
drawing up of the contract, the several lines agree to supply the 
Secretary of the N. D. L. V. with all the data and information neces¬ 
sary. In all the administrative details this agreement is subject to 
the conditions incorporated in the N. D. L. V. pooling contract 
already explained. 

In addition to many other details, the agreement provides, in 
article 10, that— 

The port of Havre is especially reserved, both for freight and passenger busi¬ 
ness, by direct line to and from the United States and Canada, to the Trans¬ 
atlantique. All other French Atlantic and Channel ports, with the exception of 
Cherbourg and Boulogne, will be also reserved to the Transatlantique, but only 
as far as passenger business by direct line to and from the United States and 
Canada is concerned. 


30 PASSENGER AGREEMENTS IN THE AMERICAN-EUROPEAN TRAFFIC. 

Article 11 stipulates that— 

The Transatlantique binds herself not to call at any port between Cronstadt 
and French frontier, either for freight or passenger business, except with the 
previous consent of the N. D. L. V. Lines. 

Article 12 provides that— 

Passengers from Scandinavia and Finland shall not be considered in any way 
In this contract, and the Transatlantique shall not engage passengers in these 
countries. 

4. Agreement J .—This contract was entered into March 9, 1904, 
between the lines composing the N. D. L. V. and the Canadian Pacific 
Railway Co. It was agreed that the Canadian Pacific Railway Co. 
will not carry passengers of Continental nationality, other than Scan¬ 
dinavian or Finnish, by its own steamers, or by any steamers in which 
it is interested, sailing from ports in Great Britain and Ireland to 
ports of Canada or the United States. The Canadian Pacific Co. 
agrees to furnish, should the Continental lines at any time require it, 
to the Secretary of the N. D. L. V. every facility for satisfying him¬ 
self that there has been no violation of the agreement. 

5. Agreement N .—This contract was entered into between the 
N. D. L. Y. Lines and the Austro-Americana. According to its terms 
the Austro-Americana is to receive, as its share off Trieste and other 
Adriatic ports, 4 per cent of the entire steerage passenger business 
which the lines of the N. D. L. Y. carry from North Sea and Channel 
ports, and which the Austro-Americana carries on its line from 
Adriatic ports to the United States and Canada, deducting the Italian 
and Oriental passengers of the Transatlantique. In this total steerage 
business there are to be included all passengers exceeding 32,500 
which the Cunard Line carries via Fiume and Trieste in one year. 

Article 15 of the agreement provides that— 

The parties agree that the Austro-Americana endeavors to secure its business 
out of Austria. 

Article IT provides that— 

The Austro-Americana pledges itself to establish no freight or passenger 
service of any kind between Bordeaux or ports north of Bordeaux and North 
America and Canada, or to have any interest, direct or indirect, in such service. 
Single sailings for freight only will be allowed provided they do not enter into 
competition with the N. D. L. V. Lines. The N. D. L. V. Lines declare to have 
no Intention of establishing lines from the Adriatic to North America or Can¬ 
ada. Should the N. D. L. V., on account of an existing or a competition about 


PASSENGER AGREEMENTS IN THE AMERICAN-EUROPEAN TRAFFIC. 31 

to arise, be compelled to establish such a line, then the Austro-Americana shall 
have the right to consider this agreement of no force as long as such a line is 
continued. 

The 4 per cent allotment to the Austro-Americana was based on 
26 sailings per year, and, in case the sailings should number less, 
the percentage has to be reduced proportionately. In case either 
party should not reach its share, the other party will pay a com¬ 
pensation price of M 100 per passenger short. Both parties agree, 
for the purpose of arriving at the monthly accounts, to furnish 
statistics of the passengers forwarded to the Secretary of the 
N. D. L. V. at regular intervals. The steerage rate of the Austro- 
Americana must be the same as the lowest rate charged by the North 
German Lloyd or the Hamburg-American Lines for their slow 
steamers, and in case the line can not reach its share it shall reduce 
its rates. In case disputes arise the same shall be considered by 
the arbitrator of the N. D. L. V. 

\ 

The agreement was made for the period of January 1, 1905, to 
December 21, 1909, and according to its terms is to continue there¬ 
after from year to year. 

Passenger Agreements Affecting British and North Continental Ports. 

Of the 11 contracts submitted as evidence in the suit of the United 
States V. the Hamburg-American Line et ah, three involve the pas¬ 
senger traffic to and from ports of the United Kingdom and North 
Europe and deal respectively with the steerage, the second class, 
and first class passenger business. Briefly summarized these three 
agreements comprise the following: 

1. Agreement A A .—This agreement was entered into for a term 
extending from February 5, 1908, to February 28, 1911 (then to 
continue from year to year unless discontinued) by the Allan Line, 
the Anchor Line, the Cunard Steamship Co., the Hamburg- 
American Line, the North German Lloyd, the Holland-American 
Line, the Bed Star Line, the International Mercantile Marine Co.’s 
Lines (except the Red Star Line), and the Canadian Pacific Rail¬ 
way Co. (Atlantic Steamship Lines). It will be observed that the 
above list includes all of the N. D. L. V. Lines. 


32 PASSENGER AGREEMENTS IN THE AMERICAN-EUROPEAN TRAFFIC. 


According to the terms of the contract the following is provided: 

(1) The companies guarantee to each other certain designated 
percentage allotments of the total steerage traffic forwarded by the 
parties from all European ports to and via the United States and 
Canada and vice versa, in vessels owned, leased, chartered, or con¬ 
trolled by them without regard to the flag. Italian and Oriental 
passengers, however, forwarded by direct steamers through the 
Straits of Gibraltar, are excepted. (This class of passenger traffic 
is governed by other agreements.) The percentage allotment of each 
line’s business is specified both in the westbound and the eastbound 
traffic as follows: 

For the westbound traffic. 


Allan Line (United States 


services) _ 0.62 

Cunard Line_13. 75 

Hamburg-American-19. 61 

Holland-American _ 6.63 

Anchor Line_ 3. 40 


North German Lloyd- 26.53 i 


Red Star Line_ 9. 71 

White Star Line_ 8. 60 

American Line_ 6. 68 

Dominion Line_ 6. 47 


100. 00 


For the eastbound traffic. 


Allan Line (Canadian services, 

including Portland in winter) _ 4. 95 

Anchor Line_ 3. 93 

Cunard Line (Liverpool serv¬ 
ices) -12. 77 

Cunard Fiume-Trieste Line_ 2. 35 

Hamburg-American-12. 35 

Holland-American- 6.10 

North German Lloyd-18. 79 


Red Star Line- 


. 8.56 

White Star Line _ _ 


15. 49 

American Line__ 


8. 72 

Southampton —_ 

6. 74 


Liverpool - 

1. 98 


Dominion Line _ _ 


1.50 

Canadian Pacific Ry. Co. 

(At- 


lantic Steamship Lines) 

— 

4. 49 



100.00 


(2) Lines whose steerage transportation in a year exceeds in point 
of number the proportions fixed must pay a compensation price of 
£4 for each passenger carried in excess of the established proportion 
to the lines which have not reached their participation quota; and 
such payment is to be made in proportion to the number of steeragers 
which each line is short. This compensation feature is declared in 

X the agreement to be “ one of the main features of the entire con¬ 
tract.” Compensation prices can be advanced or lowered only by a 
majority of the lines, representing at least 75 per cent of the shares 
fixed in the allotted percentages. 

(3) Each line undertakes to arrange its service in such a manner 
that the number of steeragers which it actually carries corresponds 
as nearly as possible to the number allotted to it by the contract. 



























PASSENGER AGREEMENTS IN THE AMERICAN-EUROPEAN TRAFFIC. 33 

(4) No line has the right to alter its steerage and second-class 
cabin rates without having previously informed the Secretary of the 
Conference. Unless there is a second-class rate agreement, the lowest 
second-class cabin rate of any line westbound must be at least £2, 
and eastbound at least $10 higher than the highest normal third- 
class rates of the respective steamers. 

(5) The lines agree to pay certain prescribed commissions to the 
agents. 

(6) All advertising and printed matter sent to the agents must 
be submitted to the Secretary of the Conference. The conduct of the 
agents is also carefully regulated. 

(7) Compensation accounts are prepared monthly by the Secre¬ 
tary, and final settlement is made at the end of each calendar year 
on the basis of the compensation account prepared by the Secretary, 
and objections to the correctness of the accounts form no release 
from obligations. 

- (8) Differences arising between the lines are settled by arbi¬ 
tration, and the opinion of the arbitrators has the force of a legal 
judgment. 

(9) The resolutions of the Continental Conference and the North 
Atlantic Conference in New York are not binding upon the lines if 
the same are directly opposed to or in contradiction to the provi¬ 
sions of the contract. 

(10) The Hamburg-American Line and the North German Lloyd 
will use their efforts to arrange that the passengers of the non-Ger¬ 
man lines may pass the Silesian, Saxon, and German frontiers. 

(11) Agents of the lines which are parties to the agreement shall 
not interest themselves in the booking of passengers for new outside 
competing lines. 

(12) For each infraction of the terms of this agreement a penalty 
of £250 is imposed, and in case of willful infraction £2,500. 

2. Agreement W ,—This agreement was entered into on February 
28, 1911 (then to continue from year to year) by the Allan Line, 
American Line, Anchor Line, Canadian Pacific Railway Co., Com- 
pagnie Generale Transatlantique, Cunard Line, Dominion Line, 
Donaldson Line, Hamburg-American Line, Holland-American Line, 
North German Lloyd, Red Star Line, and White Star Line for the 
purpose of regulating the second-class passenger business. The 

25655 '—VOL 4—14-3 



34 PASSENGER AGREEMENTS IN THE AMERICAN-EUROPEAN TRAFFIC. 

agreement provides for minimum ocean rates for second-class pas¬ 
sengers, both eastbound and westbound. These rates are specified 
for the various types of steamers of the different lines in two elab¬ 
orate tables, representing, respectively, the “ rates to and from Eng¬ 
land ” and “Continental lines’ rates,” the rates to and from England 
varvins: from £12 in the case of such steamers as the Lusitania and 
Mauritania to £8 for the most inferior type of steamer listed. New 
steamers are to be rated, as they enter the trade, on a similar basis, 
the rating to be subject to revision by arbitration in case any differ¬ 
ence of opinion arises. It should be noted that, unlike the steerage 
agreements, no pooling arrangement is provided for in this 
agreement. 

Commissions to agents are definitely prescribed, and no refunds 
or allowances can be made. The fine for any breach of the agree¬ 
ment by any line party thereto shall not be less than £50 nor more 
than £500 sterling, and in the case of an agent not less than £5 nor 
more than £100. Disputes are subject to arbitration and the deci¬ 
sion of the arbitrator is final. All official communications between 
the lines must be made through the Secretary of the North Atlantic 
Passenger Conference or of the N. D. L. V. 

3. Agreement F.—This agreement was entered into on February 
5, 1908, for the period ending February 28, 1911 (then to be con¬ 
tinued from year to year), by the Allan Line, American Line, An¬ 
chor Line, Atlantic Transport Line, Canadian Pacific Kailway Co., 
Compagnie Generale Transatlantique, Cunard Line, Dominion Line. 
Hamburg-American Line, Holland-American Line, Leyland Line, 
North German Lloyd, Red Star Line, and White Star Line. Whereas 
Agreement W governed the second class passenger business of the 
above-mentioned lines, this agreement has for its purpose the estab¬ 
lishment of minimum ocean rates for the first class passenger busi¬ 
ness, both eastbound and westbound. The minimum rates, as in the 
case of the second class passenger agreement, are specified for the 
various types of steamers (which are enumerated by name) in an 
elaborate table, and range from £25.10 in the case of the Lusitania 
and Mauritania to £12.10 for the most inferior steamers contained 
in the list. In all other respects the detailed provisions of this con¬ 
tract are similar in nature to those contained in Agreement W. 


PASSENGER AGREEMENTS IN THE AMERICAN-EUROPEAN TRAFFIC. 35 

Mediterranean Passenger Agreements. 

1. Mediterranean Steerage Traffic Agreement of February 8^ 
1909 .—This agreement was submitted to the Committee by one of 
the parties thereto, and governs the steerage traffic carried by the 
lines operating from Italy to the United States and Canada, and 
vice versa. It was concluded by two groups of lines, viz, group 1, 
consisting of the Italia, La Veloce, Lloyd Italiano, Lloyd Sabaudo, 
Navigazione Generale Italiana and Sicula Americana, of the one 
part, and group 2, comprising the Anchor Line, Fabre Line, Ham¬ 
burg-American Line, North German Lloyd, and the White Star 
Line, of the other part. In the westbound traffic the contract gov¬ 
erns all steerage passengers carried by the above mentioned lines 
embarking at Mediterranean ports, and other ports called at later, 
for American and Canadian ports, while in the eastbound traffic the 
contract relates to all steerage passengers carried by the same lines 
from the United States and Canada to Mediterranean ports and 
other ports called at previously. The entire traffic covered by the 
contract is divided between the two groups of lines on the assump¬ 
tion that each group will have at least 120 departures per year, and 
that the participation of each group shall be as follows: 

Westbound: 

Group 1, 49.13 per cent. 

Group 2, 50.87 per cent. 

Eastbound: 

Group 1, 49.485 per cent. 

Group 2, 50.515 per cent. 

If in the westbound and eastbound traffic either group of lines has 
less than 120 departures, its percentage allotment of the total traffic 
is to be reduced proportionately, but no sailings over 120 by either 
group are to be counted in the division. The term “ steerage passen¬ 
gers” is carefully defined, and all passengers forwarded in any 
intermediate class between steerage and cabin, as well as all cabin 
passengers westbound not having paid a fare of at least 325 lires, 
are to be accounted for in the pool. Settlements must‘be made 
annually, each year extending from July 1 to June 30 of the next 
year, and for the westbound and eastbound traffic separately. In 
case any group should exceed its proportion during any year it must 


36 PASSENGER AGREEMENTS IN THE AMERICAN-EUROPEAN TRAEFia 

pay to the group which is short of its proportion a compensation of 
110 lires for each excess passenger. The Fabre Line, however, is 
given the right to carry westbound passengers from Marseilles 
(either direct or calling at a Spanish port) to the extent of 1 per 
cent of the total allotment westboimd of the Group 2 lines without 
accounting for them in the pool, any excess over 1 per cent to be 
pooled. Each group of lines obligates itself to arrange its service, 
in both the eastbound and westbound traffic, so as to make the num¬ 
ber of steeragers carried correspond as nearly as possible to the 
allotment. Moreover, in case the weekly statistics of traffic, which 
must be furnished by each line to the Secretary of the Mediterranean 
Conference, should show that any group has exceeded its proportion, 
that group is obliged at once to adopt measures which are calculated 
to bring about a correct adjustment. Each group must advise the 
Secretary of the corrective measures which it wishes to adopt before 
putting the same into operation. If these measures prove ineffective 
in bringing about the desired adjustment, the two groups must meet 
and decide upon other suitable measures to be adopted. 

Steerage fares or commission rates can not be altered by any line 
without having previously informed the Secretary, who in turn must 
wire or write at once to the other lines. Commissions to agents are 
prescribed in the agreement. The prepaid rates in America are to 
be equivalent to the highest gross cash rate charged by the respective 
lines in Europe, unless corrective measures must be undertaken to 
keep within the agreed apportionment of the traffic, and American 
and Italian money must be reckoned according to a scale prescribed 
in the contract, which is based on the parity of lit. 5.20=$1. If, 
in the case of certain steamers, especially high cash rates are fixed 
by the Italian Commissioner of Emigration, the lines have the right 
to quote for the respective steamers a prepaid rate corresponding to 
the cash rate of other regular steamers, but such rate must not be 
lower than the highest prepaid rate of the steamers of the other 
group. Article 15 of the agreement provided that— 

All steerage fares are from the Italian port of embarkation to the American 
port of debarkation, or vice versa. Passengers booked through to or from 
other places have to pay besides said fare the actual official tariff rate of the 
respective transportation undertaking by which the transportation takes place, 
and such fare must always be separately quoted and appear separately on the 
cash or prepaid ticket, except free transportation may be given between New 


PASSENGER AGREEMENTS IN THE AMERICAN-EUROPEAN TRAFFIC. 37 


York and Philadelphia and between New York and Boston as long as the 
Italian Government puts this obligation on any line. An exception to this is 
made in the case of passengers to and from Spain, the Azores, Greece, Africa 
and Asia, for which special rates shall be fixed from time to time. 

By way of explanation, the management of one of the lines, party 
to the agreement of 1909, has advised the Committee that the agree¬ 
ment was renewed in 1911 with the exclusion, however, of the Fabre 
Line; this company, although in principle willing to rejoin the con¬ 
tract, not having been satisfied with the participation quota offered 
to it. It is also explained by the management of this line that— 

The object of the agreement, so far as westbound traffic is concerned, was 
not to regulate rates, which are fixed by the Italian Government, but to do 
away with the exorbitant commissions which, as a result of unrestrained com¬ 
petition, were then freely paid by all the lines either openly or secretly and 
which, while artificially stimulating emigration, left the companies practically 
at a loss. Since the above agreement was started the commissions were kept 
all around at a reasonable level, but owing to the withdrawal of the Fabre Line 
and the aggressive attitude of this company, they have again risen of late and 
in some instances have reached a figure which must be described as decidedly 
unsound. 

2. Article SI of the MediterraTiean Steerage Traffic Agreement of 
February 8, 1909, provides that special contracts shall be made by 
the two groups of lines constituting the Mediterranean Conference 
with— 

(a) The American Line and the White Star Line (English Channel 
services) and with the Compagnie G6n6rale Transatlantique 
as regards the steerage traffic in Italian and Oriental steerage 
passengers via Havre and Cherbourg to ports of the United 
State and Canada, and vice versa. 

W The Austro-Americana as regards their steerage traffic between 
ports of the United States and Canada and Mediterranean 
ports. 

(c) The Compania Transatlantica Espafiola as regards their steer¬ 
age traffic from the United States or Canada to Italy, and vice 
versa. 

Each of the groups of lines party to the general Mediterranean 
Agreement agrees to bear its proportionate share of the payments 
to be made or received under the contract made with the above- 
mentioned lines, and it is expressly stipulated in the contract that 
these lines “with which special agreements exist” are not “looked 
upon as opposition lines in the spirit of this contract.” 


38 PASSENGER AGREEMENTS IN THE AMERICAN-EUROPEAN TRAFFIC. 


3. Special Agreement' A 'between dll the lines which are parties 
to the Mediterranean Steerage Traffic Agreement of February 8,1909 
(^designated as party A)^ on the one part^ and the Gompagnie Gene- 
rale Transatlantique (designated as party the American Line 
and the White Star Line (designated as party G)^ on the other part^ 
and covering the following traffic: 

Westbound: 

(o) All steerage passengers carried on steamers belonging to lines 
parties to this contract and the Compania Transatlantica Es- 
panola embarking in Italian and other ports called at later for 
ports of North America and Canada, whatever their nationality 
may be. 

All Italian and Oriental emigrants carried on steamers belong¬ 
ing to lines parties to this contract embarking in Cherbourg 
and all Italian emigrants embarking at Havre for ports of 
the United States or Canada. 

Eastbound: 

(o) All steerage passengers carried on steamers belonging to lines 
parties to this contract and on steamers of the Cunard Line, 
the Austro-Americana, and the Compania Transatlantica Es- 
panola coming from ports of the United States and Canada and 
debarking in Italian ports and other ports called at before, 
whatever their destination may be, 

(b) All Italian and Oriental steerage passengers landing in Cher¬ 
bourg or Havre carried by steamers belonging to lines parties 
to this contract. 

Of the entire traffic as defined the lines designated under “A” 
guarantee to the Gompagnie Generale Transatlantique 10.5 per cent 
of their Italian business westbound and 10.75 per cent of both their 
Italian and Oriental business eastbound. A certain proportion of 
the traffic was allotted to the American and White Star Lines, but 
the agreement furnished to the committee did not indicate the per¬ 
centages. Should the lines mentioned under “ B ” and “ C ” fail to 
attain their guaranteed shares, then, according to the agreement, the 
lines under “A” are to pay to the line which fails to reach this 
proportion a compensation price of 75 lires for each passenger short, 
and vice versa. In all other particulars this contract was to be gov¬ 
erned by the stipulations of the principal contract, viz, the Agreement 
of February 8, 1909, and the period during which the two contracts 
were to run, and the manner of terminating the same, were made to 
coincide. 


Passenger agreements in the american-european traffic. 39 

4. ^‘Special Agreement B ” between the lines which are parties to 
the Agreement of February 8, 1909 {^designated as party ‘‘A”), and 
the Gunard {Mediterranean service^ and Austro-Americana Lines 
{designated respectively as parties “-5 ” and “ (7”), and applying to 
all steerage passengers leaving from ports of the United States and 
Canada and landing in Italian ports and ports called at previously, 
whatever their destination may be. Like Special Agreement “A,” 
this agreement is made to coincide with the principal agreement of 
February 8, 1909, in date as well as all important details of adminis¬ 
tration. The lines under “ A ” guarantee the Cunard Line 4.41 per 
cent, and the Austro-Americana 2.53 per cent, of the entire traffic. 
These proportions are fixed on the assumption that the Cunard and 
Austro-Americana Lines will each have at least 26 sailings annually 
with steeragers to Italy. Should the sailings of either line be less 
this percentage allotment will be decreased by one twenty-sixth for 
each sailing that the line is short. The lines under “ A ” also agree 
to pay the Cunard and Austro-Americana Lines a compensation price 
of 110 lires per passenger in case these lines fail to attain their 
designated proportion. On the other hand, if these two lines have 
exceeded their proportion they agree to pay to the lines under “ A ” 
the same compensation for each excess passenger. 

Summary of Provisions and Practices Relating to Passenger Agpreements 

in General. 

In the foregoing abstract little reference is made to the working 
details whereby the terms of the agreements are administered and 
enforced. By far most of the sections of the several agreements, 
some of which are of great length, are devoted to the administrative 
features. Practically all the agreements are essentially alike (dif¬ 
fering occasionally only in the minor details) in such matters as the 
making of settlements in the pool, the penalties and guaranties 
imposed, the corrective measures to be adopted by the lines in case 
they exceed their allotted portions of the traffic, the regulation of 
the conduct and commissions of agents, the issuance of circulars and 
publications, the admission and withdrawal of lines, the safeguards 
against competition, and the government of the conferences. As 
regards each of these features, the essential practices will be sum¬ 
marized, using the two most important agreements, viz. Agreement 


40 PASSENGER AGREEMENTS IN THE AMERICAN-EUROPEAN TRAFFIC. 

AA (comprising the English and north European services) and the 
Mediterranean Steerage Agreement of February 8,1909, as a basis. 

Manner of effecting settlements in the fooling arrangements. —To 
enable the Secretary of the conference to compile the'compensation 
accounts, both agreements provide that the lines must furnish to him 
every 7th, 15th, 23d, and last day of a month their statistics of the 
steeragers and second class cabin passengers carried by them during 
the week ending with these respective dates, at the same time giving 
the dates of sailing and the destinations of the steamers. This data 
the Secretary must furnish weekly to the other lines in the agreements. 
He must also compile and furnish to the interested lines a monthly 
statement showing the relative position of the lines to each other. 
These monthly statements must be in the possession of the lines not 
later than a certain day of each month following the month to which 
the account applies. A fine is imposed upon any line delaying the 
delivering of the statistics for more than three days. 

The lines which are, according to these provisional accounts, in 
excess of their share of the total traffic must pay within a fortnight 
after the receipt of the Secretary’s notice the resulting compensation 
as directed by the Secretary. A final settlement is made at the end 
of the year on the basis of a compensation account, prepared by the 
Secretary and covering the whole period. Objections to this final 
account must be made within four weeks after its issuance, failing 
which the account will stand. Moreover, objections to the correctness 
of the accounts form no release from the obligations imposed. 

Corrective measures adopted hy lines exceeding their percent¬ 
ages. —Under both agreements each line obligates itself to arrange 
its service in such a manner that the number of steeragers actually 
carried corresponds, as nearly as possible, with the number allotted 
by the contract. As a means of deterring the lines from endeavor¬ 
ing to exceed their participation quota, it has been explained that a 
compensation price must be paid into the pool for each excess passen¬ 
ger carried by any line beyond its stipulated percentage. But if, 
despite this compensation plan, the statistics furnished by the Secre¬ 
tary of the conference should show that any line has exceeded its 
proportion, or failed to reach the same, such line is called upon to 
adopt measures calculated to bring about a correct adjustment; but 
L'efore putting such measures into operation, the line is bound to 


PASSENGER AGREEMENTS IN THE AMERICAN-EUROPEAN TRAFFIC. 41 


advise the Secretary of the measures proposed to be adopted, so that 
he may notify the other parties to the contract. The several lines 
must then await the results of the measures adopted. Should it 
develop that they do not produce the desired results, the lines may 
meet in conference and by a majority (in the A A Agreement of 
75 per cent) may direct that other and more forcible measures, which, 
however, can only refer to rates, be put into operation. It is ex¬ 
pressly understood that there is no appeal against the decision taken 
by such a majority of the lines, and that each line is bound to put 
the measures adopted into force without demur. 

It is interesting to note that one of the commentaries in Agree¬ 
ment AA states that all parties were unanimous in the opinion 
that the adjustment is, whenever practicable, to be effected, not by 
reducing the rates of one line, but, on the contrary, by raising the 
rates of one or several of the lines. The organized method by which 
the lines seek to maintain their respective percentages and avoid the 
payment of large compensation money is well illustrated as regards 
the German lines by the explanation furnished to the committee by 
Mr. Robert P. Skinner, consul general at Hamburg. He writes 
that— 

As far as Germany is concerned, the mechanism of the arrangement whereby 
all emigrants passing through Germany are directed to Conference Line steam¬ 
ers is as follows: The Prussian Government has established 10 sanitary control 
stations at various points along the frontier of Russia. It is a requirement of 
law or regulation, with ample means for making it effective, that every emigrant 
arriving in Prussia shall first sojourn at one of these stations, where he is 
routed to the United States and forwarded to the seaboard. The carrying out 
of the administrative and sanitary sides of this work is intrusted by the Govern¬ 
ment to the Hamburg-American Line and to the North German Lloyd Line, 
acting jointly as concessionnaires. 

All trans-Atlantic companies desiring to sell tickets to the United States must 
first procure a Government license, and such traffic as they secure must there¬ 
upon be passed through the control stations which the two great German steam¬ 
ship companies manage. The companies belonging to the pool all have such 
licenses, and in each control station, which is also a ticket office, there is a 
blackboard showing the cost of tickets on a given date over the different lines. 
These rates are fixed monthly. Traffic is evenly divided by increasing or de¬ 
creasing the cost of transportation over a given line. The individual passenger 
can select his route so long as it is a pool route, but the varying prices are so 
arranged that each ship in the course of the year obtains its fair share of the 
business. 


42 PASSENGER AGREEMENTS IN THE AMERICAN-EUROPEAN TRAFFIC. 

Guaranties and 'penalties adopted for the enforcement of the 
agreements, —As a guaranty for the faithful performance of the 
conditions of the contract, each line is obliged to deposit with the 
Secretary of the conference a guaranty, amounting to 125,000 lires 
under the Mediterranean Agreement, and £1,000 for each per cent of 
its participation quota in the case of Agreement AA. The total sum 
thus deposited “ shall be considered the amount of liquidated dam¬ 
ages and entirely forfeited” in case any line unduly withdraws 
from the contract before its expiration, or resorts to any actions 
which render the continuance of the agreement impossible, such as 
the refusal to pay compensation money, or to replenish the deposits 
in due time, or to assist in any way a new opposition line, or to 
start a new line which will seriously interfere with the trade. 

For each contravention or infraction of any stipulation of the 
agreement penalties are fixed by the arbitrator, ranging from a mini¬ 
mum of 5,000 lires to the full amount on deposit in the case of the 
Mediterranean Agreement, and from £250 to the full deposit under 
Agreement AA. If, however, the infraction is made willfully and de¬ 
signedly, especially in case of any intentionally incorrect statements 
in respect to the statistics of traffic, the penalty imposed under the 
two agreements is fixed at 50,000 lires and £2,500, respectively. 
Each line is also responsible for any infraction of the contract on 
the part of representatives, agents, and employees, and fines are 
inflicted upon the representatives, agents, and employees guilty of 
such infractions. All penalties must be paid within a certain num¬ 
ber of days following the award, or the deposit will be drawn upon 
to the amount of the penalty. All penalties are first distributed 
pro rata among the lines which have claims to compensation, and any 
remaining surplus is divided among all the lines, excluding the 
penalized line, in proportion to their participation quota. 

Regulations concerning the issuance of circulars and other publica¬ 
tions. —The lines obligate themselves to issue no circulars or pub¬ 
lications reflecting upon or instituting unfavorable comparisons with 
any conference lines. They also agree not to support any newspapers 
which may systematically attack any conference lines. As stated 
in the agreements, it was decided, “ in view of the fact that the stipu¬ 
lations referred to have stood the test of many years’ practical work¬ 
ing,” not to alter any of the conditions of the Continental Con- 


PASSENGEK AGREEMENTS IN THE AMERICAN-EUROPEAN TRAFFIC. 43 

ference, and that it is agreed that the words “ support no newspaper ” 
are more especially understood to mean that no advertisements are 
to be given to such newspapers. The lines, furthermore, agree that 
no communications in regard to transactions or resolutions concern¬ 
ing the agreements shall be made to the press or any outside party 
without special and unanimous consent of all the lines. All lines 
must also send to the Secretary of the conference a sufficient number 
of copies of all circulars and other printed matter sent to the agents, 
so that copies may be promptly forwarded to all the members of 
the conference. 

Regulation of agents .—A considerable portion of each agreement 
is devoted to the supervision of agents, and a number of the lines 
have advised the Committee that they regard the control of agency 
forces a primary object of the contracts. This control is exercised in 
the following ways: 

(1) All the lines obligate themselves to dismiss any agent who, in 
respect to any other conference line, has disregarded the stipulations 
of the agreements pertaining to the issuance of injurious circulars 
and publications. Not only must such agents be dismissed, but all 
the lines agree to discontinue, directly or indirectly, all business 
connections with them. 

(2) All commissions to agents and general agents are definitely 
prescribed, both in America and Europe, as regards the different 
classes of passengers, and all rebating of commissions by agents to 
passengers, other agents, or other persons is strictly forbidden. 
Fines are inflicted on agents guilty of violating these commission 
rules, and in case of repetition agents are disqualified. The cor¬ 
respondence placed in evidence in the suit brought against the Ham¬ 
burg-American Line et ah, clearly shows that the conference lines 
have had frequent occasion to inflict the above mentioned penalties. 

(3) Agents representing the conference lines are forbidden, un¬ 
der penalty of immediate disqualification, to book passengers for any 
opposition line or in any way to be interested in such line. Various 
representatives of nonconference lines testified in the Government’s 
suit against the Hamburg-American Line et al. concerning the almost 
insuperable obstacles confronting them by virtue of this practice. 
Not only were all the well-established steamship agencies obliged 
to refuse booking passengers by the few independent lines, but such 


44 PASSENGER AGREEMENTS IN THE AMERICAN-EUROPEAN TRAJFFIGi 

nonconference lines also found it extremely difficult to engage inde¬ 
pendent agents, who knew that their activities would be severely 
limited if restricted to the booking of passengers on nonconference 
steamers. 

Administration of the contracts^ and, adjudication of disputes .— 
The execution and control of all stipulations in the passenger agree¬ 
ments are intrusted to two authorities, viz, the Secretary of the 
conference and the arbitrator or arbitrators chosen to settle disputes. 
The Secretary, appointed usually by a majority of three-fourths of 
the lines, is assigned the following duties: (1) To receive all statis¬ 
tical statements and to examine the accounts, for which purpose he is 
given access to the passenger offices of the lines and can there examine 
all books and correspondence as far as is deemed necessary; (2) to 
communicate these statistics and account to all the lines concerned, 
and act as mediator in all transactions between the lines, as far as 
they pertain to matters connected with the contract; (3) to control 
steerage prices and commissions, and to see that all lines receive 
regularly and simultaneously all necessary information; (4) to collect 
the payment of all penalties; (5) to call all conference meetings and 
to keep the minutes of these meetings; (6) to compute the compensa¬ 
tion accounts; and (7) to use every effort to settle amicably all 
differences between the lines. 

Should any disputes arise the agreements provide that no line has 
the right to summon any other line before the courts. Instead each 
line has the right to call for an award by the arbitrators appointed 
for the settlement of disputes. Thus, using the Mediterranean Agree¬ 
ment of 1909 for illustrative purposes, all appeals for an award must 
be directed to the Secretary, who within three days must communicate 
the same to all the other parties to the contract. The disputing 
parties must each name an arbitrator, these arbitrators in turn select¬ 
ing an umpire from a list of individuals specified in the agreement. 
It is noteworthy in this connection that the persons named in this 
contract also appear as arbitrators in many of the agreements govern¬ 
ing the lines operating from British and North Continental ports. 
In case the two arbitrators can not agree upon an umpire the dispute 
shall be settled by lot; and if it should happen that either of the 
disputing parties fails to appoint an arbitrator within two weeks 
after notice has been given, then the arbitrator nominated by the 
other party has full power to settle the case. 


PASSENGER AGREEMENTS IN THE AMERICAN-EUROPEAN TRAFFIC. 45 

All parties to the dispute have the right to be heard, and the 
award of the arbitrators must be accompanied by a written argument 
setting forth the reasons for the decision. In arriving at the verdict 
the arbitrators are free to determine the method of taking the evi¬ 
dence and of ascertaining the facts, and are not bound to observe 
the rules governing legal procedure. The award is also declared by 
the agreements “to take the place of and is equivalent to a legal 
judgment given by the highest instance of any law court, against 
which all right of appeal is exhausted, and it is expressly understood 
that all the parties to this contract relinquish all and every right 
to employ against the award given any legal means of whatever 
name or description such legal means may be.” 

Admission of new lines to the conference and the alteration of 
existing agreements. —Other lines may be admitted to the confer¬ 
ence, and conditions of the existing contract may be altered and new 
terms and conditions added thereto, only by the unanimous vote of 
all the lines, unless otherwise provided for in the agreement. All 
alterations and additions become valid and binding only when all 
the lines have given their written consent to the same. The with¬ 
drawal of any line from the agreement releases the other lines from 
all obligations, except the payment of compensation accounts in¬ 
curred up to the date of withdrawal, unless the lines which have 
not withdrawn agree among themselves to continue the present 
contract. 

Methods of meeting the competition of nonconference lines .—^As 
already explained, any conference line will forfeit its entire deposit 
if it renders any assistance, directly or indirectly, to a nonconfer¬ 
ence line, or itself starts a new service which will interfere with the 
trade covered by the conference. As regards meeting the competi¬ 
tion of nonconference lines, however, the agreements are silent, and 
the matter seems to have been reserved entirely for conference action. 
Judging from the facts obtained by the Committee, and the evidence 
presented in the suit against the Hamburg-American Line et al., it 
appears that in or about the year 1908 (the Committee is not certain 
of the continuance of this practice at the present time) the confer¬ 
ence lines authorized the appointment of a committee—designated 
as the “small committee”—for the purpose of destroying the com¬ 
petition of nonconference lines by selecting steamers—known as 
fighting steamers—to sail on the same days and between the same 


46 PASSENGER AGREEMENTS IN THE AMERICAN-EUROPEAN TRAFFIC. 

ports as (and at rates as low as or lower than) the independent 
steamers. 

This committee, it seems, received its instructions from abroad, 
and would select for competitive purposes a suitable steamer of any 
of the conference lines whose date of sailing happened to coincide 
' with the date of sailing of the opposition-line steamer, and the regu¬ 
lar rates would be reduced to a point sufficiently low to secure the 
traffic. The evidence in the Government suit shows that such oppo¬ 
sition sailings were repeatedly instituted against the Russian Volun¬ 
teer Fleet and the Uranium Steamship Co. Any surplus of pas¬ 
sengers which were booked for the fighting steamer, but which could 
not be carried by the same, would be transferred to other steamers 
at the reduced rates. The expenses and loss from the lower rates, 
resulting to any line whose vessel had been selected, were distributed 
over the membership of the conference. It was thus a case of all the 
lines, united in conference, opposing every sailing of a single oppo¬ 
sition line. By distributing the loss over the several members of the 
conference, each constituent line would suffer proportionately much 
less than the one line which was fighting the entire group, and 
which would inevitably soon exhaust its resources in the conflict 
with the combined power of the large lines with their superior speed 
and better third class accommodations. 

Steamship Conferences. 

An examination of the accompanying chart shows that the lines 
connected with the several agreements outlined in the foregoing pages 
are organized into four conferences, viz, the Continental Conference, 
the North Atlantic Conference, the American Atlantic Conference, 
and the Mediterranean Conference. The membership of the Conti¬ 
nental Conference is composed, in the main, of the lines which are 
parties to the N. D. L. V. and affiliated agreements; that of the North 
Atlantic Conference is comprised principally of the lines engaged in 
the traffic between American and Canadian ports and the United 
Kingdom and Scandinavia, i. e., those connected with agreements 
A A, V, and W; while the membership of the Mediterranean Confer¬ 
ence consists of the lines enumerated in the Mediterranean Agree¬ 
ment of 1909 and affiliated contracts. 

Prior to 1908 the Continental and North Atlantic Conferences acted 
separately, and in whichever conference a matter first came up it was 


t 


PASSENGER AGREEMENTS IN THE AMERICAN-EUROPEAN TRAFFIC. 47 

customary for that conference to act on the same and advise the other 

conference of its decision. At the close of June, 1908, however, these 
two conferences, having many interests in common, agreed to work 

jointly in certain matters. Accordingly they resolved that it is 
“recommended that the Continental and North Atlantic Conferences 
be continued as separate bodies; but on matters of general interest 
to both joint meetings shall be held and action taken (with joint pro¬ 
ceedings) under the title of the American Atlantic Conference.” It 
also appears that, in the main, the North Atlantic and Continental 
Conferences, although separate organizations, are practically iden¬ 
tical in their purposes and general organization. Other resolutions 
of these conferences stipulated that separate action may be taken 
where matters concern a particular conference or trade; and further 
provision was made to the effect that the Italian business “ shall be 
governed, as heretofore, by the Mediterranean Conference.” 

The organization of the numerous passenger lines into three dis¬ 
tinct conferences should not cause one to lose sight of the fact that 
these conferences are closely interrelated in many ways. In the first 
place, a considerable number of the lines belonging to the Conti¬ 
nental and North Atlantic Conferences (which we have seen act 
jointly in many matters) are also members of the Mediterranean 
Conference. Thus the Hamburg-American, North German Lloyd, 
and Austro-Americana Lines (which are members of the Continental 
Conference), and the Anchor, Cunard, White Star, and American 
Lines (which are members of the North Atlantic Conference) are also 
parties to the Mediterranean agreements, which are administered by 
the Mediterranean Conference. Again, all of these conferences are 
said to have the same general Secretary, viz, Mr. H. Peters, with 
headquarters at Jena, Germany, who has been aptly designated by 
Mr. Paul Gottheil as a “ universal secretary.” Testimony in the suit 
against the Hamburg-American Line et al. shows that recently, at 
least, the Mediterranean and North Atlantic Conferences had the 
same Secretary on the American side, and that all the conferences 
have their American office in the same room. The three basic agree¬ 
ments governing, respectively, the Mediterranean, North Continental, 
and British spheres of the passenger traffic also designate the same 
personnel for purposes of arbitrating disputes. It is also worthy of 
note that the policy and practices of the several conferences, such 
as those pertaining to the regulation of agents, the booking of pas- 


48 PASSENGER AGREEMENTS IN THE AMERICAN-EUROPEAN TRAFFIC. 

sengers, the imposition of fines and penalties, the restrictions upon 
advertising, the relations between the steamship lines and the rail¬ 
roads, the manner of adopting and enforcing resolutions, etc., are 
substantially the same for all. 

Agreements Between American Railroads and North Atlantic Passenger 

Lines. 

It remains to be stated that practically all the established passenger 
lines operating to and from Europe have entered into agreements or 
understandings with a number of the important railroad passenger 
associations of this country, whereby the steamship lines agree to 
turn over their steerage traffic to the railroads composing these 
associations, the railroads in turn paying the steamship lines a 
so-called “commercial allowance” (a commission) on the rail rate 
from the port of arrival to the point of destination. Mr. Lawson 
Sandford, former American Secretary of the steamship conferences, 
testified in the suit against the Ham burg-American Line et al., that 
while to his knowledge no written agreement existed between the 
steamship lines and the Central Passenger and Trunk Line Asso¬ 
ciations, the railroads composing the same have for many years 
voluntarily paid a commission (stated by Mr. C. C. McCain, Chair¬ 
man of the Trunk Line Association, to be 10 per cent of the fare 
in the case of the eight trunk lines, no commission being paid when 
the inland fare is less than $2.50) to the steamship lines on the 
business delivered to the rail lines. 

As regards the Western Passenger Association (comprising some 
30 western railroads), a written agreement between it and the con¬ 
ference steamship lines, which became effective December 1, 1897, 
was submitted in evidence in the Government’s suit against the 
Hamburg-American Line et al. Briefly summarized, the memoran¬ 
dum of this agreement, embodying all amendments up to and includ¬ 
ing January 26, 1905, contains the following important provisions: 

(1) The steamship lines, as party of the first part, and the rail¬ 
roads, as party of the second part, will respectively determine by 
unanimous vote what other steamship lines and railroads shall be¬ 
come parties to the agreement. 

(2) The steamship lines obligate themselves to control and deliver 
to the representative of the joint routing committee of the railroads 
all westbound steerage passengers landed at ports of the United 


PASSENGEE AGREEMENTS IN THE AMERICAN-EUEOPEAN TRAFFIC. 49 

States, at the through fares as applied to westbound trans-Atlantic 
immigrant traffic. In turn, the railroads agree to control such traffic 
“ to the extent, if necessary, of withdrawing the agency of the party 
of the first part (the steamship lines) in all classes of business from 
booking agents or others who may divert, or attempt to divert, the 
business from the channels provided for herein.” Both parties also 
obligate themselves not to permit the conversion of steerage passen¬ 
gers to first or second class for the purpose of removing the business 
from the control of this agreement. 

(3) The railroads agree to pay to the steamship lines a commission 
of 10 per cent, with a maximum limit of $4, on the maximum through 
immigrant rate from New York to destination. It is expressly 
agreed by the railroads that they will not pay any commission allow¬ 
ance to any trans-Atlantic lines which are not parties to this agree¬ 
ment. The steamship lines, in turn, agree not to accept any commis¬ 
sion on the business covered by the contract from any party other 
than the railroads which are parties to this agreement and that they 
will undertake to make effective a schedule of commissions to booking 
agents which shall be uniform through all Atlantic and Gulf ports. 

(4) With certain specified exceptions the steamship lines will 
undertake to book through to final destination all immigrant steerage 
passengers carried on their steamers. 

(5) Joint conferences may be called by the representative of either 
party to deal with alleged violation of or threatened interference 
with this agreement. Both parties also agree not to enter into any 
arrangements with any other parties which shall adversely affect the 
interests of either party in any matter referred to in this agreement. 

To ascertain the economic utility of the aforementioned agreements 
between steamship lines and railroads, a brief description of how the 
steerage traffic is handled is essential. Mr. C. C. McCain’s testimony 
in the Government’s suit against the Hamburg-American Line et al. 
explains the modus operandi as regards the trunk-line territory. 
Briefly abstracted, his testimony shows that the immigrant purchases 
transportation from a point in Europe to an interior point in the 
United States beyond trunk-line territory and produces at the rail¬ 
road station at Ellis Island an order for the rail transportation. 
This order is drawn on the Ellis Island agency of the steamship line 
and is presented to the railroad’s joint ticket office at Ellis Island. 

25655 °— VOL 4—14 - 4 



50 PASSENGER AGREEMENTS IN THE AMERICAN-EUROPEAN TRAFFIC. 

After having passed the examination at the island the immigrants 
come into the custody of the railroads, and their agent and his rep¬ 
resentatives arrange for their routing, both passengers and baggage 
being transferred by the joint agency to the respective roads. In 
this respect all westbound traffic is apportioned on the basis of an 
equal division between the eight trunk lines which are members of 
the joint agency at the island. Few immigrants have any discre¬ 
tion in the route over which they travel, Mr. McCain estimating that 
probably not more than 1 per cent of the immigrants whose tickets 
are presented at the Ellis Island agency have any idea or interest as 
to what route they want to take. In other words, only a negligible 
number make their wishes known as to the route, but if they have 
a preference that selection is observed. 

The steamship lines leave to the railroads the entire say as to what 
roads shall participate in the arrangement; and, according to Mr. 
McCain, it is a part of the understanding with the various passenger 
associations that the routing of the westbound immigrant traffic 
shall be controlled by the routing committee of these associations. 
The steamship companies also have nothing to do with the appor¬ 
tionment of the traffic, this being attended to by a joint agency of the 
railroads. Accounts of the movements of the passengers are kept, 
and the joint agency receives instructions as to the routing, and on 
the basis of these instructions makes the allotments. All the pas¬ 
sengers of one ship, if convenient, might be transferred to one road. 
In other words, the division between the lines can not be followed in¬ 
variably, nor does it happen that every road always receives its equal 
share. As a matter of fact, however, the division is practically even. 
The roads attempt to equalize the traffic as much as possible, and the 
deficits prevailing at a given time are made good in future routings. 

The trunk lines also have, according to Mr. McCain, a clearing 
house for the settlement of commercial differences and another de¬ 
partment through which the accounts, as between the steamship lines 
and the railroads, are handled. This department collects from the 
steamship companies the moneys which they have collected for inland 
railroad fares, and turns the same over to the railroads. It also 
collects from the railroads on their respective tickets the amount of 
the commissions due the steamship companies as per the agreement 
and transfers that amount over to them. 


PASSENGER AGREEMENTS IN THE AMERICAN-EUROPEAN TRAFFIC. 51 

Many advantages are claimed for the agreements and practices as 
just outlined. The joint handling and clearing of the business is 
regarded as both economical and convenient. If each immigrant were 
consulted as to his preference of routes, Ellis Island would be con¬ 
gested for hours each day, without any compensating advantages 
whatsoever resulting. In fact, it is argued that the entire system has 
been discussed with the Interstate Commerce Commission and that 
its advantages have been acknowledged by that Commission. Before 
the inauguration of the joint control of the steerage traffic at Ellis 
Island the immigrant was largely at the mercy of many individuals 
at New York, especially boarding-house runners. The present system 
of organized control, on the contrary, effectively protects the immi¬ 
grant and his baggage while being transferred from steamship to 
railroad, and in no way causes hardship or injury. It has eliminated 
the abuses which prevailed under the former system of demoralizing 
competition and has placed a traffic of huge proportions on a high 
and orderly basis. 

In justification of the commissions paid by the railroads to the 
steamship lines, the railroads claim that they look to the water lines 
to assume the risk of the agents paying the fares and that the com¬ 
mercial allowance is in a sense a method of compensating the steam¬ 
ship lines for assuming this financial responsibility. It also appears 
that the steamship companies could send a large portion of the immi¬ 
grant traffic by way of Canada, where the railroads pay commissions 
to the water lines on all classes of trans-Atlantic passenger traffic. 
For this reason, as well as for the agency service rendered, American 
railroads argue that they are justified in paying commissions to the 
steamship companies. On the other hand, criticism has been directed 
against the discriminatory features of some of these agreements, as 
exemplified by the contract between the conference lines and the 
Western Passenger Association. Special reference is made to the 
section which stipulates that the commercial allowance shall be paid 
exclusively to the contracting steamship lines and be withheld from 
all competitors. This provision is regarded as a means of unfair com¬ 
petition, in so far that the contracting lines are able to receive cer¬ 
tain sums, which they have made the railroads agree not to pay 
to independent lines. 



CHAPTER II. 

FREIGHT AGREEMENTS IN THE AMERICAN-ETJROFEAN TRADE. 


General Nature of Freight Agreements. 

The combined passenger and cargo type of steamers, used by most 
of the lines operating between North Atlantic American ports and 
Europe, represents by far the highest development of the steamship 
business. Owing to the dominant importance of the passenger move¬ 
ment, and the requirements of this traffic, the lines must necessarily 
supply vessels of the highest class, and sailings with the greatest 
regularity. Furthermore, the large number of vessels with great ton¬ 
nage capacity necessary to cope with the requirements of the exten¬ 
sive passenger traffic has resulted in an available cargo space at the 
leading ports out of all proportion to the freight offered. There is 
always excess cargo space in the westbound voyage from Europe, 
and in the eastbound traffic also except during periods when the 
movement of bulk freight is exceptionally large. Kates on bulk 
freight have therefore naturally tended to be low, as long as the law 
of supply and demand was allowed to operate freely. 

This great supply of tonnage by combination steamers has also 
rendered the North Atlantic traffic much less attractive to tramp ves¬ 
sels than most other trades, except at ports where the regular lines 
fail for some reason to supply the tonnage demanded by shippers. 
Mr. W. G. Sickel testified (vol. 1, p. 560) that “ combination steamers 
can be operated for freight more economically and cheaply than a 
freight ship. That is, we can afford to carry the freight on a com¬ 
bination steamer cheaper than we can on a freight steamer, and an 
ordinary freight steamer can not compete with us in the North 
Atlantic section of the United States.” It would seem to follow 
from this that the control of the passenger traffic by certain lines 
between certain ports, as explained in the previous chapter of 

this report, would in itself give those lines a decided advantage in 

53 



54 FREIGHT AGREEMENTS IN THE AMERICAN-EUROPEAN TRADE. 

the freight traffic over outside lines which are purely freight car¬ 
riers, or which are successfully opposed by the conference lines in 
their effort to obtain a share of the passenger business. Several wit¬ 
nesses before the Committee (vol. 2, p. 1294) also lamented the fact 
that in the grain export business, owing to the failure of the regular 
lines to supply the necessary tonnage at a port like Baltimore, they 
were placed at a disadvantage in being obliged to charter tramps, 
suffering in consequence not only a loss in profits but all the incon¬ 
venience of irregularity in service. 

The foregoing considerations have an important bearing upon the 
nature of the freight agreements found in the North Atlantic trade. 
In the first place, the necessary existence of high-class vessels and 
regular sailings for the accommodation of the passenger business 
has rendered deferred rebates less necessary in the North Atlantic 
traffic than in probably any other trade. In fact, only one instance 
of deferred rebates has been disclosed in this trade, viz., in connec¬ 
tion with the Mediterranean Westbound Freight Agreement. Fur¬ 
thermore, the disproportion of freight to the amount of space avail¬ 
able, the comparative lack of attractiveness of the trade to tramp 
vessels, and the value of the cargo to passenger vessels as dead weight 
make the imposition of a deferred rebate tie upon shippers unneces¬ 
sary, if not absolutely impracticable. 

Necessity of frequent and regular sailings in connection with the 
passenger trade has also made it impossible to limit sailings to meet 
the actual needs of the freight market. Instead, the pooling agree¬ 
ments, which refer to the matter at all, were entered into on the basis 
that each line or group of lines should make at least a specified num¬ 
ber of trips, and that failure on the part of any line to do so would 
reduce that line’s participation in the pool. In these respects the 
North Atlantic steamship freight ^agreements differ essentially from 
those governing the new and undeveloped long-distance trades, where 
no one owner could serve the market with sufficiently frequent sail¬ 
ings of a satisfactory character, and where the different lines (1) 
rotate the sailings of their vessels and agree on sailing dates and 
ports of discharge, or (2) find it desirable, where the return cargoes 
are insufficient to fill the ships, or where the companies must pro¬ 
tect themselves against .the inroads of tramps or competing lines, to 
assure themselves of a continuous patronage, which alone can finan- 


FREIGHT AGREEMENTS IN THE AMERICAN-EUROPEAN TRADE. 55 

cially make possible the operation of a re^lar service, by the impo¬ 
sition of a deferred rebate tie upon their patrons. 

On the other hand, the great shortage of cargo as compared with 
the available tonnage, and the resulting tendency toward low rates 
under conditions of open competition, have caused the regular North 
Atlantic lines to conclude a large number of freight agreements. 
In the westbound traffic these agreements extend to every section 
of Europe, and either have for their purpose the fixing of rates or 
the apportionment of the territory between the lines. “ These 
agreements,” as explained by the New York Committee of steamship 
line representatives, “ are the result of years of fighting and have 
become absolutely necessary. The trade is insufficient to furnish the 
steamers engaged in the various services with full cargoes. The 
struggle for such cargoes as were available had reduced the rates 
to such an abnormally low level that they had ceased to be of any 
value or attraction. The very high terminal charges on this side, 
varying for pier rent from $50,000 to $125,000 per annum for each 
line, the exacting demands made by the consignees who leave their 
goods on the wharf, using it as a warehouse, and the large claims 
which had to be paid annually, absorbed all the profit which might 
otherwise have been made. The trade was finally rescued from 
utter demoralization by the agreements mentioned, and we do not 
see how the trade could be conducted otherwise” (vol. 1, p. 1358). 
The westbound agreements referred to are either: 

(1) Minimum rate arrangements, as exemplified by the English 
agreements; the minimum rates, however, always being the 
actual rates because the vessels never secure full cargoes; or 

(2) Fixed rate agreements, as illustrated by the Baltic and 

some of the Mediterranean agreements; or 

(3) Pooling agreements, apportioning the traffic according 
to designated percentages, as the N. D. L. V. Westbound Freight 
Agreement, the Baltic Pool Agreement, and the Mediterranean 
Freight Agreement of December 15, 1911; or 

(4) Agreements reserving certain North Continental European 
ports exclusively to certain lines which are parties to the 
contracts. 

With reference to the east bound business, agreements among the 
lines exist to a more limited extent. Here the shipments consist 


56 FKEIGHT AGREEMENTS IN THE AMERICAN-EUEOPEAN TRADE. 

largely of the products of the soil which must be shipped at rates 
which will enable American shippers to compete with the same prod¬ 
ucts from other countries. As stated by the New York Committee 
(vol. 1, p. 1358), ‘‘The ports of discharge are only the gateways 
through which the traffic moves; all the different groups of ports are 
more or less in competition with each other, and the forwarding cost, 
either by rail or by water, to the ultimate destination determines the 
freight rate which each port can secure.” In view also of the value 
of cargo to large passenger vessels for ballasting purposes, freight is 
often desired at any cast, illustrations having been furnished to the 
Committee where grain was actually purchased by the lines. Briefly 
classified, steamship agreements in the eastbound trade may be 
grouped under the following: 

(1) Minimum rate agreements, as in the case of the English 
and Mediterranean lines. Usually the minimum rates are also 
the actual rates charged. These agreements, however, do not 
pertain in the case of the English lines to grain and other bulky 
freight, but apply only to manufactured articles and light freight 
of all kinds. For the reasons mentioned above the lines are 
free to accept bulk freight at any rate found necessary, except 
that in the case of grain, as will be explained later, no line can 
accept more than a limited amount at rates below a prescribed 
minimum. 

(2) A pooling agreement, in connection with the Baltic trade, 
which apportions the exports of bulk freight among the several 
lines. 

(3) Agreements reserving certain North Continental Euro¬ 
pean ports exclusively to certain lines as regards the traffic to 
and from all North Atlantic American' ports. In connection 
with these agreements, it is asserted that there is no understand¬ 
ing between the North Atlantic lines that the rates, for example, 
from New York to Bremen and from New York to Hamburg 
(these ports being reserved to the North German Lloyd and 
Hamburg-American Lines, respectively, as regards sailings from 
all American ports north of Savannah) shall bear any particular 
relation to each other. (Testimony of W. G. Sickel, vol. 1, 
p. 563.) In a measure European ports reserved to certain lines 
are the gateways to noncompetitive territory, and to that extent 


FREIGHT AGREEMENTS IN THE AMERICAN-EUROPEAN TRADE. 57 


the line controlling any port stands in a favorable position. But 
as Mr. Sickel testified, the rates of the several lines from Amer¬ 
ican ports to these ports are not ahva 5 ^s the same. For example, 
the ports of Hamburg and Bremen, he asserted, are in competi¬ 
tion as regards a considerable portion of the trade, because they 
are mere gateways to the interior, and a lowering of the rate by 
the North German Lloyd via Bremen will have a depressing 
effect upon the rate to the same destination via Hamburg. 

Relations between Lines Operating from South Atlantic Ports. 

• 

All the foregoing remarks pertain only to the traffic to and from 
the North Atlantic ports of the United States. In the trade from 
South Atlantic and Gulf ports, it appears that the important regular 
lines must meet the competition of a large number of steamers which 
in most instances are chartered and operated by loading brokers 
under a line name. This competition in the South Atlantic trade is 
due largely to the fact that the regular lines operate strictly freight 
steamers from those ports, thus losing the advantages associated with 
the combined type of freight and passenger steamers operated from 
the Northern ports (vol. 1, p. 549). 

With few exceptions, judging from the answers which many of the 
companies have sent in reply to the Committee’s Schedule of Inquiries, 
the lines from South Atlantic ports have apparently not entered 
into definite rate understandings with their competitors. As regards 
the leading ports, however, the important lines are friendly to each 
other and charge uniform rates. Thus with reference to the port of 
Galveston, Mr. H. H. Haines, Traffic Manager of the Galveston Com¬ 
mercial Association, testified to the following effect: 

There are about 60 lines of steamers operating from Galveston to European 
ports, embracing practically all European countries. . . . The principal lines, 
and the lines we look upon as being the influential lines out of Galveston, are 
the Harrison, Leyland, and Elder Dempster Lines, which operate to Liverpool. 
Of course, in the trans-Atlantic tonnage Liverpool is the pulse of that market. 
Your rate from any port to Liverpool feels more keenly the law of supply and 
demand than does any other marine route. . . . The Harrison, Elder Dempster, 
and Leyland Lines are operating in absolute harmony. Whenever you And 
what the rate is via one line you may blank upon it that is the rate via the 
other. 

I can not say of my own knowledge that the lines meet in conference, but I 
should have a very poor opinion of my intelligence if I thought they did 


58 FREIGHT AGREEMENTS IN THE AMERICAN-EUROPEAN TRADE. 

not. . , . There is no open rate on cotton; that rate varies, but it always varies 
via the different lines at the same moment. The only difference in the cotton 
rate is when a vessel has some room left and, wanting to sail at once, goes in 
the open market and offers a cent or two off for what they call “ distress room ” 
in order to get the cotton that day. If you wanted to book your cotton for any 
given period subsequently to that date, you would pay the fixed price, the stand¬ 
ard rate, via all the lines. . . . The situation in Galveston is a little different in 
one respect from perhaps any other port. We have several firms of independent 
steamship agents there who charter what are called tramp steamers, orphans 
in the marine business, and they load their steamers for their own account dur¬ 
ing the busy season in Galveston for ports abroad. They are able to get con- 

« 

siderable business for that sort of trade, as much as 200,000 bales to the agency 
perhaps, and that at times has its effect upon the rate situation out of Galves¬ 
ton, but it is never very extensive—a cent or two per hundred pounds perhaps. 
But the old standard basis of rates is fixed by the old established, strong lines, 
and a man who has a tramp steamer always realizes that he can go into the 
market and, by quoting a cent or two under the regular lines, get his share of 
the business. He does not get much; the bulk of the business goes via the 
standard lines. 

The foreign trade rates from Galveston, as also from New Orleans, are abso¬ 
lutely the same. The rate from Galveston to Liverpool is, as a rule, used as the 
basis of rates to the other European ports. Trans-Atlantic transportation by 
water is the only transportation I know of that is at all affected by the law of 
supply and demand. Three years ago we were shipping cotton from Galveston 
to Genoa, Italy, for 18 cents per 100 pounds. That was because there was not 
enough traffic in the world for the ships of the world. Cotton at the same 
period went to Liverpool for about 22 cents. This year cotton from Galveston 
to Liverpool brought as high as 70 cents, but now it is a world-wide condition 
that brought that about. (Vol. 2, pp. 1117-1119.) 

Mr. Franklin also testified (vol. 1, p. 598) that there are friendly- 
interests running out of both New Orleans and Galveston, viz., the 
Leyland and Harrison lines from New Orleans; and the same lines, 
together with the Gulf Transport Line, from Galveston. These lines 
are working together closely and have an understanding whereby 
they keep each other posted whenever any rates are changed. No rate 
fixing agreement, according to this testimony, exists between these 
companies and the other leading lines operating from the ports, 
although “they may exchange views, and if one decided to break 
they may as a matter of courtesy advise the other. ... As a mat¬ 
ter of final result the lines have practically the same rates; but as a 
matter of competition the rates are frequently changed by one with¬ 
out nou tying the other. But that does not last long. We will know 


FREIGHT AGREEMENTS IN THE AMERICAN-EUROPEAN TRADE. 59 

in a few minutes if the rates have been changed. ... It is not a 
question of getting together; it is simply a question of putting your 
rates parallel to their rates—you are forced together. The competi¬ 
tion in all the southern ports is a matter of tramp steamers for the 
reason that the cotton trade moves in large bulk at certain seasons of 
the year, and moves in full cargoes. . . . And it is a season’s 
business. It is a business that the tramp steamer can very well 
engage in to much better advantage than he can engage in any gen¬ 
eral cargo business where you have to have regularity of service.” 

Classification of Freight Agreements and Conferences. 

Most of the trans-Atlantic lines, operating regularly between Europe 
and North Atlantic American ports, either ignored or declined to 
answer the Committee’s inquiries relative to the existence of agree¬ 
ments or^ understandings to which they might be parties. From the 
answers received, however, when viewed in the light of all the infor¬ 
mation collected during the Committee’s investigation, it is clear that 
practically all the well-known lines connecting North Atlantic Ameri¬ 
can ports with those of the United Kingdom, North Europe and the 
Mediterranean are parties to numerous freight agreements covering, 
in one way or another, nearly every sphere of the American-European 
trade. Considered in their entirety, these agreements reveal a situa¬ 
tion in the freight carrying trade easily comparable, from the stand¬ 
point of the comprehensiveness of the agreements, with that presented 
in the North Atlantic passenger traffic. In fact, the attached chart 
shows that over 40 regular trans-Atlantic lines are parties in their re¬ 
spective trades to at least 20 agreements involving the freight traffic, 
and that the important lines are members of at least four main freight 
conferences. 

The four conferences referred to are the Trans-Atlantic Freight 
Conference, the American Atlantic Conference, the Atlantic Confer¬ 
ence, and the Mediterranean Conference. Judging from the reports 
of the lines which are members thereof, the membership of these 
conferences is the following: 

(1) The Trans-Atlantic Freight Conference is composed of 
the English lines, and pertains to the eastbound traffic. Ap¬ 
parently the conference is divided into sections, such as the 
Liverpool, London, Glasgow and Manchester Conferences. The 


60 FREIGHT AGREEMENTS IN THE AMERICAN-EUROPEAN TRADE. 

Donaldson Line, for example, reported that it is a member of 
this conference “ so far as the same is connected with traffic to 
Glasgow,” whereas the Johnston Line declared that it is a 
member “so far as the same is connected with traffic to Liver¬ 
pool.” Both lines named Mr. S. E. Morse, of 17 State Street, 
New York, as Secretary of the conference. 

(2) The American Atlantic Conference has the Continental 
lines as members. The Holland-American Line (a member) re¬ 
ported that “ this conference consists of the Continental lines 
between the United States and the Continent of Europe,” and 
the Secretary is Mr. S. E. Morse, of 17 State Street, New York. 

(3) The Atlantic Conference, according to the reports of the 
Anchor and Holland-American Lines (both members) “ is made 
up of the British as well as Continental Lines.” The Holland- 
American Line’s report explains that this conference is also a 
passenger conference, and that it has the same Secretary as the 
N. D. L. V., viz.. Dr. H. Peters of Jena, Germany. 

(4) The membership of the Mediterranean Conference con¬ 
sists of the lines enumerated in the Mediterranean Freight 
Agreement of December 15, 1911, and probably other lines en¬ 
gaged in the American-Mediterranean trade. As reported by 
the Anchor Line, Mr. S. E. Morse is the acting Secretary of this 
conference in New York. On the European side. Dr. H. Peters, 
already named as Secretary of the Atlantic and N. D. L. V. Con¬ 
ferences, is also General Secretary of this conference. 

A comprehensive understanding of the numerous agreements ex¬ 
isting for the regulation of the North Atlantic freight traffic can be 
best obtained by considering the same in groups. This method has 
the advantage of showing that the several groups of lines, each serv¬ 
ing a certain sphere of Europe, are governed by agreements for the 
fixing of rates or the division of territory to such an extent that 
practically the entire traffic is being conducted by nearly all the 
regular lines in their respective spheres in the spirit of harmonious 
cooperation. A fourfold classification of the agreements indicated 
on the attached chart logically suggests itself, viz., (1) The minimum 
rate agreements in the trade to and from the United Kingdom; 
(2) the agreements governing the trade between German, Dutch, 
Belgian and French ports and the United States; (3) the Baltic 


MEDITBREAirEAN STEERAGE TRAFFIC 
AGREEMENT 
Feb.8. 1909. 

The provisions of this con¬ 
tract are administered by the 

MEDlTEERAFEAR CONFERENCE. 

Renewed in 1911, by all the lines 
except the Pabre Line. 


SPECIAL AGREEMENT B. 

u.s 

and 

Canada to Italy. 

Oct. 

1, 1908 


AGREEMENT W. 
Second class traffic 
Feb, 5, 1908. 

Renewed Feb. E8, 1911. 


AMERICAN ATLANTIC CONFERENCE 
Nov. 9, 1909. (Continental and 
North Atlantic Conferences, 
matters of general interest, hold 
joint meetings and take joint 
action, under title of "American 
Atlantic Conference 


CONTINENTAL 

CONFERENCE 


NORTH ATLANTIC 
CONFERENCE 
April 23, 189b. 


DONALDSON LINE 


ALLAN LINE 


SICULA AMERICANA 


GOMP AGNJE GENERALE TBANSATf.ANTTQTTR 


PABRE LINE 


HAMBURG AMERICAN LINE 


NORTH GERMAN LLOYD 


WHITE STAR LINE 


AMPRTCATJ T.TMT^ 


DOMINION LINE 


ATLANTIC TRANSPORT LINE 


LEYLAND LINE 


CUNARD STEAMSHIP CO. 


sMum & CO: 

RUSSIAN AMERICAN LINE 


HANSA LINE 


SGANDIMA7IA-AMERIGAN 


COMPANIA TRANSATLANTICA ESFANOLA 

"ADRIA” (Royal.Hungarian Sea Nav- 

-gatio n HorrmaTivT 






dAHADIAN NO^'jggRy TTg 


msFNm mmm 


in the 


NORTH ATLANTIC TRADE. 


j2^ 



1 ANCHOR LINE 


[sANAPIAK PACIFIC RY.(Atlantic S.S.lines 


1 ITALIA 


"lA mCCP- 

IIOVT) imiAiJS' ■ 


LLOYD SABAUDO 


HAVIGAZrONE GENERALE ITALIANA 


AGREEMENT AA. 
Steerage Contract. 


Feb. 5, 1908. 


AGREEMENT J. 
Immigrant Traffic. 
March 9, 1904. 


AGREEMENT L 
Steerage 
Jan. 1, 1904* 



NORD-ADLANTISCHER DAMPPER LINIEN 
VERBAND 

(N. D. L, V.) 

Steerage Pool 

Jan. 19. 1892. 


AGREEMENT N, 

Trieste and Adriatic Steerage 
Nov. 14, 1904. 


AGREEMENT V. 
First Class Business 
Feb. 5. 1908. 


AGREEMENT 0, 


House Doc. No. 805; 63d Cong., 2d Sess. 
























































































































































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f^REIGHT AGREEMENTS IN THE AMERICAN-EUROPEAN TRADE. 61 

agreements, and (4) the Mediterranean agreements. These groups 
of agreements will now be considered in the order suggested. 

MinimTun Bate Agreements in the Trade To and From the United 

Kingdom. 

The replies filed by the Anchor, Donaldson, Johnston, Furness, 
Manchester and International Mercantile Marine Lines, in answer 
to the Committee’s Schedule of Inquiries, show that all the regular 
lines between Canada and North Atlantic ports of the United States 
and the four leading ports of the United Kingdom, namely, Liver¬ 
pool, London, Glasgow and Manchester, are parties to minimum 
rate understandings, both westbound and eastbound, which are 
entered into from time to time according to freight market condi¬ 
tions. The minor ports of the United Kingdom, it appears, are in 
nearly every instance served by only one line, and in nearly all 
cases this line is a party to the Liverpool, London, Glasgow or Man¬ 
chester rate agreements. 

Minimum Eastbound Rate Agreements .—Eastbound traffic from 
Canada and northern ports of the United States, judging from the . 
reports furnished by the six above mentioned lines, is governed by 
four conferences, designated respectively as the Liverpool, London, 
Glasgow and Manchester Conferences. All of these conferences, 
according to the filed reports, have the same Secretary on the Amer¬ 
ican side, namely, Mr. Sidney E. Morse. The representatives of the 
lines, operating to each of these main ports, meet in conference at 
17 State Street, New York City, to discuss their rates; and file and 
notify each other of their minimum rates upon a large selected list 
of articles. Minutes of these meetings are kept and a sample copy of 
the last “ Compilation of minimum rate notices and statements ” for 
each of the four conferences (all dated September 18, 1912) was 
furnished to the Committee by the aforementioned lines. The fol- 


I 


62 FREIGHT AGREEMENTS IN THE AMERICAN-EUROPEAN TRADE. 


lowing is a list of the 20 lines, together with their several serv¬ 
ices, which were represented in these compilations:— 


MINIMUM EASTBOUND RATE AGREEMENTS BETWEEN LINES OPER¬ 
ATING FROM AMERICA TO BRITISH PORTS. 


Names of conferences. Names of lines. 


Services. 


’ Furness Line: 

St. John to London. 

V Halifax to London. 

Philadelphia Transat¬ 
lantic Line: 

Philadelphia to London. 

Atlantic Transport Line: 

New York to London. 
Philadelphia to London. 
Baltimore to London. 

Ley land Line: 

Boston to London. 

Wilson & Fumess-Ley- , 
land Line: 


LONDON CONFER¬ 
ENCE: 


Thompson Line: 

I 


Allan Line: 


Boston to London. 

Portland to London. 
Montreal to London. 

Montreal to London. 


Canadian Pacific Railway 
Co.: 


Montreal to London. 

St. John to London. 
Halifax to London. 

Chesapeake & Ohio 
Steamship Co.: 

Newport News to London. 
Norfolk to London. 


Cunard Line: 


\ 


Montreal to London. 
Portland to London. 




FREIGHT AGREEMENTS IN THE AMERICAN-EUROPEAN TRADE, 63 


Names of conferences. 


LIVEKPOOL CONFER¬ 
ENCE: 


GLASGOW CONFER¬ 
ENCE; 


Names of lines 
Allan Line; 


American Line: 


Services. 

Montreal to Liverpool. 

St. John to Liverpool. 
Halifax to Liverpool. 

Philadelphia to Liverpool 


Canadian Pacific Railway 
Co.; 


Chesapeake & Ohio 
Steamship Co.: 


Cunard Line; 

Furness Line: 

Johnston Line: 
Ley land Line: 
Warren Line: 
White Star Line: 


Montreal to Liverpool. 

St. John to Liverpool. 
Halifax to Liverpool. 

Newport News to Liverpo«4. 
Norfolk to Liverpool. 

New York to Liverpool. 
Boston to Liverpool. 

St. John to Liverpool, 
Halifax to Liverpool. 

Baltimore to Liverpool. 

Boston to Liverpool. 

Boston to Liverpool. 


White Star-Dominion 
Line: 


/Allan Line: 


Anchor Line; 
Donaldson Line: 


New York to Liverpool. 
Boston to Liverpool. 

i 

Portland to Liverpool. 
Montreal to Liverpool. 

Montreal to Glasgow. 
Portland to Glasgow. 
Boston to Glasgow. 
PhOadelphia to Glasgow. 

New York to Glasgow. 

Montreal to Glasgow. 

St. John to Glasgow. 
Newport News to Glasgow. 
Norfolk to Glasgow. 





64 FREIGHT AGREEMENTS IN THE AMERICAN-EUROPEAN TRADE. 


Names of conferences. Names of lines. 

fManchester Liners: 


MANCHESTER CON¬ 
FERENCE: 


Lamport & Holt Line: 


Borvices. 


Boston to Manchester. 
Philadelphia to Manchester. 

New York to Manchester. 


Each of the four “ compilations ” gives the minimum class rates 
(for 12 classes), and also itemizes the commodity rates for a very large 
number of articles, indicating all changes in the minimum rate 
notices as compared with the last compilation. The rates thus filed 
are only subject to change after an agreed period of notice, varying 
from 30 to 60 days. In other words, the lines have agreed that they 
will not take freight below the minimum rates; but these rates are 
subject to change, and any line can serve notice that at the end of 30 
or 60 days it will change its rates. No penalties are imposed for an 
infraction of the agreement, but it is distinctly understood that the 
agreement prohibits any line from assuming the right to change any 
of its minimum rates until after the 30 or 60 days have expired. 
When asked if the minimum rates thus agreed upon are not the only 
rates in use, Mr. P. A. S. Franklin, representing the International 
Mercantile Marine Co., admitted that this was the case, “ except on 
certain occasions when the rates advance very rapidly and we go 
higher than the minimum rates.” (Vol. 1, p. 609.) He further tes¬ 
tified that during 1912 the average empty space of the Atlantic 
Transport Line’s vessels in the eastbound voyage was about one- 
fourth of the capacity, and in 1905 as high as one-half, and that when 
the lines have empty space the minimum rates are the rates actually 
charged. 

This minimum rate agreement, however, does not cover the heavy 
bulk traffic consisting of grain, flour, oil cake, cotton, and similar 
commodities (comprising, according to Mr. Franklin’s estimate, from 
one-third to two-thirds of the total traffic, depending generally upon 
the volume of the grain movement), but is confined to the high-priced 
freight, on which the shippers as well as the ship lines are anxious 
to have fixed rates equally applicable to all. No agreement exists 
regarding grain except that the lines agree that they will not take 
more than 12 loads of grain at a rate less than 3 cents per bushel, I. e., 
they can make any rate they desire but must not exceed 12 loads on 
one ship, or 96,000 bushels in the case of wheat, 102,000 bushels of 



FREIGHT AGREEMENTS IN THE AMERICAN-EUROPEAN TRADE. G5 

corn, and 120,000 bushels in the case of barley. It should also be 
added that, as regards one very important commodity in our export 
trade, the managing head of one of the companies reported confi¬ 
dentially to the committee that the several lines trading to English 
ports have entered into a pooling arrangement. 

Minimum Westhound Rate Agreements .—In the westbound traffic, 
the lines operating from London, Liverpool, Glasgow and Man¬ 
chester to Canada and North Atlantic ports of the United States, 
are again organized into four conferences, a separate conference per¬ 
taining to each of these respective ports. Kepresentatives of the lines 
meet in these conferences for the fixing of minimum rates and the 
discussion of bills of lading and all other matters of mutual interest. 
Owing to the fact that the vessels are never full on the westbound 
voyage (the empty space of the Atlantic Transport Line having 
averaged during 1912, 8,900 tons as compared to a capacity of 14,000 
tons), the minimum rates established in these conferences are always 
the rates actually charged (vol. 1, p. 578). 

The Committee has been unable to determine the relations existing 
between the several groups of lines comprising the westbound con¬ 
ferences. Mr. Franklin testified (vol. 1, p. 579) that there is no 
direct connection, for example, between the London and Liverpool 
Conferences and that the groups of lines are not working together, 
although (1) some of the companies are represented in both confer¬ 
ences, and (2) the ownership of some of the apparently independent 
lines in the two conferences is the same. That certain arrangements, 
however, exist between the several groups of lines seems to be indi¬ 
cated by the report made to the Committee by the Anchor Line, a 
member of the Glasgow Conference, to the effect that “ the line has 
an understanding as to minimum rates of freight on certain merchan¬ 
dise westbound with the lines from Liverpool, Hull and London.” 

Agreements Governing the Trade Between German, Dutch, Belgian and 

French Ports and the United States. 

Westhound agreements: 

(1) When testifying before the Committee, Mr. P. A. S. 
Franklin submitted in evidence (vol. 1, p. 592) a copy of the N. D. 
L. V. W^estbound Freight Agreement, entered into on March 10, 1894, 
by the Hamburg-American, North German Lloyd, Holland-Amer- 
ican and Bed Star Lines. This agreement comprises the total freight 
25655 °— VOL 4—14 - 5 



66 FREIGHT AGREEMENTS IN THE AMERICAN-EUROPEAN TRADE. 

traffic of the four lines from ports of the North German seacoast, 
Holland, and Belgium to ports of the United States. It had for its 
purpose the “ bringing about of a mutual understanding regarding 
freight rates to be maintained on a corresponding basis and to pre¬ 
serve to each separate company its share of the total income from the 
freight traffic.” The total freight receipts were originally allotted 
to the companies in the following proportions: The Hamburg-Amer¬ 
ican Line, 37.75 per cent; the North German Lloyd, 23.75 per cent; 
the Holland-American Line, 18 per cent; and the Red Star Line, 
20.50 per cent. These percentages were made up from the statements 
of freight receipts of the several lines during the years 1891-93, 
subject to future revision by the secretaries of the companies. 

The companies agreed not to accept heavy goods at less than cer¬ 
tain prescribed rates, but each line is permitted on each sailing of a 
steamer to accept heavy freight, not exceeding a total of 300 tons, at 
less than the niinimum rate, but must account for the same at the 
actual freight rate received for that quantity. Meetings, it is pro¬ 
vided, should be held every four weeks by the representatives of the 
freight departments of the combined lines for the purpose of agree¬ 
ing on the freight rates to be maintained and for the exchange of 
opinions regarding the status of the business and measures to be 
taken to meet competition. 

Especially interesting is Section 5 of the agreement which stipu¬ 
lates that “ the fixing of -fight rates even when such go below the fixed 
minimum freight rates, can be done, viz., for all ports by majority 
vote and for single ports by consent of all the lines. Furthermore, 
the cancellation of fght rates can take place by majority vote.” 
Monthly number of sailings had, the quantity of goods forwarded, 
and the freight rates received must be furnished by the lines to the 
secretary of the conference, who on the basis of the data furnished 
must compile the settlement account and transmit the same to the 
interested lines. For purposes of control, the secretary is empow¬ 
ered to inspect the manifests and books of the companies insofar 
as may be necessar 3 ^ Should it be found from the monthly state¬ 
ment that the freight receipts of any line fall short of, or exceed, the 
allotted percentages, the conference must seek to bring about an 
equalization through the regulation of rates, unless it appears prob¬ 
able that such an equalization will occur in the course of the year with- 


FREIGHT AGREEMENTS IN THE AMERICAN-EUROPEAN TRADE. 67 

r 

out any special measures. Equalization payments are made every six 
months, and each line is free to reduce its sailings up to 15 per cent 
without reducing its allotted percentage of the total freight receipts. 

Mr. Franklin’s testimony (vol. 1, p. 594) is to the effect that this 
agreement is operated entirely from the European side, and it was 
his belief that the agreement is still in force. He testified that, 
although the agreement was entered into as far back as 1894, “ it is 
the basis of what they are doing now, i. e., it is the basis of the West¬ 
bound Continental Agreement.” This view, it seems, is confirmed by 
the sworn report of the Managers of the Holland American Line to 
the Committee to the effect that “ for westbound carryings only, there 
is an agreement among some of the Continental lines, which has been 
in existence for many years.” 

(2) In the section dealing with North Atlantic passenger 
agreements reference was made to the freight traffic agreements con¬ 
tained in articles 31 and 32 of the N. D. L. V. Passenger Agreement; 
in article 10 of Agreement G, entered into between the N. D. L. V. 
and the Compagnie Generate Transatlantique; and in articles 15 and 
IT of Agreement N, concluded between the N. D. L. V. and the Austro- 
Americana. The N. D. L. V. Passenger Agreement stipulates that 
vessels in the trade with the United States shall not call either out¬ 
ward or inward at any home or adjacent port from or to which the 
vessels of any of the four lines are already sailing. The words “ in 
the trade ” are declared to comprise freight as well as passengers, 
and the words “ home or adjacent ports ” are defined for each line as 
comprising the following ports: 

In the case of the North German Lloyd, Bremen and all the ports of the 
Weser, 

In the case of the Hamburg-American Line, Hamburg, Cuxbaven, and all 
other ports of the entire Elbe, Stettin, and all ports of the Oder and Havre. 

In the case of the Red Star lAne, Antwerp, the ports of the Schelde, Flushing 
and Terneuzen included, and the entire coast of Belgium. 

In the case of the Holland-American Line, the entire coast of Holland, Flush¬ 
ing and Terneuzen included, and Boulogne-sur-I\Ier. 

Article 10 of Agreement G reserves the port of Havre to the 
Comp%nie Generale Transatlantique “both for freight and passenger 
business by direct line to and from the United States,” the French line 
in turn binding itself “ not to call at any port between Cronstadt and 
the French frontier, either for freight or passenger business, except 


68 FREIGHT AGREEMENTS IN THE AMERICAN-EUROPEAN TRADE. 

with the consent of the N. D. L. V.” Again, according to article 15 of 
Agreement N, the Austro-Americana agreed not to establish any 
freight or passenger service between Bordeaux, or ports north of 
Bordeaux, and North America and Canada, or to have any direct or 
indirect interest in such service. The N. D. L. V. on the other hand 
declared that they had no intention of establishing lines from the 
Adriatic to North America or Canada, and that in case they found it 
necessary to establish such a line, owing to existing or contemplated 
competition, the Austro-Americana was entitled to consider the agree¬ 
ment ended. 

(3) At the ports of Antwerp and Rotterdam where the Red 
Star and Holland-American lines have regular line competitors, 
arrangements have been entered into which in a measure at least 
regulate this competition. Thus from Antwerp the only two im¬ 
portant steamship lines operating to the United States are the Red 
Star Line with services to New York, Boston, Philadelphia and 
Baltimore, and the Le 3 dand Line to New Orleans, both being sub¬ 
sidiaries of the International Mercantile Marine Co. Minor out¬ 
side lines from this port, viz., the Phoenix Line to New York 
and the Castle Line to Galveston, are only able to operate their serv¬ 
ices, according to the report of Mr. Henry W. Uiederich, Consul 
General at the port, by reason of having made agreements with the 
International Mercantile Marine Co. (vol. 3, p. 32). The Phoenix 
Line is reported to enjoy by special agreement (Mr. Franklin ad¬ 
mitted the existence of an agreement, vol. 1, p. 004) a differential 
freight rate of 10 per cent under the rates of the Red Star Line. 
The latter line, it is explained, operates a weekly service with 9 
days for the voyage as against the Phoenix Line’s fortnightly service 
with 14 days for the trip. Its faster and more frequent service 
enables the Red Star Line to offer a decided advantage to shippers 
of perishable or valuable freight. It is agreed between the Inter¬ 
national Mercantile Marine Co. and the Phoenix Line that the 
former will not molest the latter on condition that it will carry no 
passengers and will yield to the Red Star Line ihe transportation 
of all freight which should be carried by its faster and more regu¬ 
lar steamers (vol. 3, p. 33). As Mr. Diederich advises the Com¬ 
mittee : 

I am informed by ship agents here that all such secondary lines were glad 
to accept these terms, for the reason that if open competition were to be 


FKEIGHT AGKEEMENTS IN THE AMEKICAN-EUKOPEAN TRADE. 69 

resumed, as in the days prior to the formation of the International Mercantile 
Marine, it would be impossible for the smaller lines to exist at all on the'North 
Atlantic. This is further explained by the fact that the days when westbound 
shipments of window glass, steel, iron, and cement were so abundant that fre¬ 
quently there was not sufficient tonnage to carry them from this port have 
passed forever, because this class of merchandise is no longer exported to the 
United States in important quantities. On the other hand, eastbouiid ship¬ 
ments from the United States are considered so unsatisfactory and fluctuating 
that they render the risk of a trans-Atlantic transport company too great a one 
for secondary lines to take. In other words, from my interviews with the ship 
agents here I And that they are only too glad to be able to work with the 
International Mercantile Marine, which, though exercising in a sense a great 
monopoly, assists in keeping them alive. They admit, however, that the Interna¬ 
tional Mercantile Marine do make it a point to crush any independent Atlantic 
service that will not enter into agreement with them. 

The regular steamship lines engaged in the carrying trade between 
Rotterdam and the United States are the Holland-American Line, 
the Uranium Steamship Co., and the Russian East Asiatic Steam¬ 
ship Co. Answers of both lines to the Committee’s Schedule of 
Inquiries, as well as testimony before the Committee, show that the 
Uranium Steamship Co. (with a service of three vessels, of 11,366 
aggregate net tonnage, from New York to Rotterdam returning via 
Halifax) has not entered into any agreement or understanding Avhat- 
soever with the Holland-American Line. Open competition exists 
between the lines. As INIr. Gottheil testified (vol. 1, p. 344), the 
Uranium Line can not obtain the rates charged by the Holland- 
American Line, because of the latter’s vastly superior service as 
regards the quality of the vessels and their much greater speed and 
regularity. 

On the other hand, the Russian East Asiatic Line’s steamers only 

call irregularly at Rotterdam on their way from America to Russian 

ports. To avoid rate cutting a traffic arrangement was concluded 

between this line and the Holland-American Line (vol 1, p. 346). 

The understanding contemplates that the Russian East Asiatic 

Steamship Co. intends to run to Russian ports only (vol. 3, p. 91); 

but occasionally, when cargo is lacking, this line is obliged to call 

elsewhere, and has selected Rotterdam as the port. Rather than 

have a competitive war with the established service of the Holland- 

American Line, the Russian East Asiatic Co. agreed to maintain the 

' * 

rates of the Holland-American Line whenever it finds it necessary 
to call for freight at the port of Rotterdam. 


70 FREIGHT AGREEMENTS IN THE AMERICAN-EUROPEAN TRADE. 

(4) A minimum rate agreement from the channel ports 
also seems to exist, according to the testimony of Mr. P. A. S. Frank¬ 
lin (vol. 1, p. 594), between the United Kingdom lines and certain 
Continental lines. While Mr. Franklin could not name the lines 
which are parties to this agreement, the Committee received an 
illuminating communication froni the Wine and Spirit Traders’ 
Society of the United States, inclosing a circular to shippers signed 
by the American Line, Cunard Line, Eed Star Line, Atlantic Trans¬ 
port Line, Holland-American Line, Compagnie Generale Trans- 
atlantique, and White Star Line (vol. 2, p. 1377). 

This communication, signed by the largest importers of wines and 
spirits, asks relief from the excessive freight rates charged by the 
carriers. A schedule of the ocean rates of the different lines from 
various European ports was furnished, with a view to illustrating 
the great and general increase in freight rates since 1910, the advance 
in some instances exceeding 100 per cent. The communication further 

s 

alleges that: “ there is little or no competition among the ocean car¬ 
riers. In some cases there is only one line from an important port. 
In other cases the two or more lines from a port charge precisely the 
same rate. In other cases, when it is practical to make shipments 
from more than one port, the rate by the lines from the two or more 
available ports are the same. When freight rates are advanced the 
advance is made by the different lines simultaneously.” (vol. 2, p. 
1377.) The circular to shippers, already referred to, is regarded by 
the signers of the communication as conclusive proof of a rate com¬ 
bination between the lines, and simply notifies the shippers that: 
‘‘ We (i. e. the undersigned lines) have the honor to inform you that, 
in view of the steady rise in coal, of the increase in salaries, the con¬ 
tinued increase of expenses of all kinds which the Maritime Industry 
has to contend with, as much in foreign ports as in France, our 
owners find themselves in the imperative necessity of increasing, 
from the 1st of January, 1913, the rates of freight now in force from 
the ports of Europe to New York.” 

Easthound Agreements .—Unlike the practice prevailing among the 
English lines operating to the ports of the United Kingdom, it 
appears that the Continental lines have not entered into any con¬ 
ference arrangements for the establishment of mininyim rates in 
the eastbound traffic. Such, at least, was the information furnished 


FREIGHT AGREEMENTS IN THE AMERICAN-EUROPEAN TRADE. 71 

by witnesses to the Committee, and by the Holland-American Line 
in its answers to the Committee’s Schedule of Inquiries. This line, 
a party to the N. D. L. V. Westbound Freight Agreement, explains 
that ‘‘there is an agreement among the Continental lines for west¬ 
bound carryings only. As regards freight traffic from the United 
States, there is no agreement whatever. Rates are established in the 
open market, either per shipment or by contract for longer periods.” 

Mr. Paul Gottheil testified (vol. 1, p. 353) that the North Con¬ 
tinental lines have probably not entered into conferences, as regards 
the eastbound traffic, because each of the leading ports in Germany, 
Holland, Belgium and France is practically in the hands of one 
company. Reference has already been made to the manner in which 
the ports of these countries have been allotted to the lines which are 
parties to the N. D. L. V. and affiliated agreements. Mention 
should also be made of the facts: (1) that the International Mercantile 
Marine Co. owns the Red Star Line operating to and from Antwerp, 
and also 25 per cent of the Holland-American Line operating to and 
from Rotterdam, and that, while no arrangement exists between the 
two companies with reference to sailings to these two ports, there is 
an understanding that each of the lines will operate from only one of 
these ports on the westward voyage (vol. 1, p. 602) ; and (2) that 
there is an agreement between the Hamburg-American Line and 
the North German Lloyd whereby these lines reserve to each other, 
respectively, the ports of Hamburg and Bremen as regards sailings 
from all American ports north of Savannah (vol. 1, pp. 560-61 and 
562-63). This reservation of the North Continental ports to the several 
companies means in its practical effect, as admitted by Mr. Gottheil, 
that there is no serious contention between the lines. The allotment 
of the ports is ascribed to the natural “ evolution of years of fighting, 
until, through a survival of the fittest, certain lines have remained 
in the trade. But in the sporadic trade to the outlying little places 
one line might go without consulting the other” (vol. 1, p. 354). 

Baltic Freight Agreements. 

Various witnesses before the Committee frankly acknowledged the 
existence of the so-called “ Baltic Pool.” According to the memo¬ 
randum furnished to the Committee by the representatives of the 
steamship companies involved, it appears that the four lines engaged 


72 FREIGHT AGREEMENTS IN THE AMERICAN-EUROPEAN TRADE. 

in the trade between the North Atlantic ports of the United States 
and the Baltic, viz., the JFIamburg-American Line, the North German 
Lloyd, the Wilson Line, and the United Steamship Co. (the latter 
company owning the Scandinavian-American Line plying between 
Boston, New York, Philadelphia, Baltimore and Newport News and 
Copenhagen, Christiania and Gothenburg), are now parties to pool¬ 
ing agreements covering both the eastbound and westbound trade. 
The memorandum of the eastbound agreement, as furnished to the 
Committee, consists of various rules and resolutions agreed to at 
various meetings of the lines during the years 1905-1912. Briefly 
summarized these rules and resolutions provide for the following: 

(1) The formation of two separate pools, one pertaining to 
flour, and the other to 18 leading commodities coming under the head 
of “Provisions.” For each of these two pools relative basis rates are 
established for the ports of Montreal, Boston, New York, Phila¬ 
delphia, Baltimore, Newport News and Norfolk, subject to such 
changes as the adjustment of tonnage may from time to time make 
necessary. As regards each pool, the four lines submitted their carry¬ 
ings for three years, and in accordance with this data the percentage 
allotment to each line was agreed upon. The results of each pool are 
divided in accordance with the agreed percentages, and an adjust¬ 
ment is effected every six months during the currency of the agree¬ 
ment, which is to continue from year to year, and the line or lines 
shown to be overcarried must pay in cash to those shortcarried any 
difference then shown. It is also agreed that all lines accept the 
pooled articles only on through bills of lading, and that where 
optional bills of lading are issued to the discharging port of the 
Atlantic steamer, with privilege to be forwarded to a Baltic port, 
such shipments are to be included in the pool, provided the privilege 
is made use of. 

If the agreement operates unfairly or disadvantageously upon any 
service, it is arranged that a readjustment shall be promptly effected 
between the owners of the lines, so as to make the disposition of the 
business fair and equitable. Disputes are referred to the decision of 
two arbitrators representing the respective interests to tlie dispute, 
who in turn are empowered to appoint an umpire, and the decision 
of the arbitrators and umpire is final and binding upon all the 
parties. It also appears that much of the freight carried must be 
transshipped from the terminal ports of these lines to the final port 


FKEIGHT AGREEMENTS IN THE AMERICAN-EUROPEAN TRADE. 73 

of destination on the Baltic, and sections 7 and 13 provide a schedule 
of arbitraries (which must be adopted by all the lines concerned 
and which must include all transshipment expenses) from the port 
of transshipment to final destination. 

(2) The establishment of a pool between the aforementioned 
four lines as regards shipments of certain articles classed as “ agricul- 
turals ” from Boston, New York, Philadelphia, Baltimore, and New¬ 
port News to Kussian and German ports on the Baltic, as well as to 
ports of Denmark, Norwa}^, and Sweden. Shipments, as in the other 
pools, are divided among the lines on the basis of agreed percentages, 
and all arbitraries are again definitely established. The other arrange¬ 
ments governing this pool are similar in character to those explained 
under the first section of this description. It is provided, however, 
that American agents be instructed to see that articles coming under 
this pool be shipped by the lines which can earn the largest net sea 
freights by arranging not only their engagements but, when possible, 
through exchange of cargo, the lines honoring each other’s through 
bills of lading. 

(3) The formation of another pool by the aforementioned 
four lines as regards the shipment of 18 other articles of export, 
comprising feed stuffs, heavy grain products and oil cakes, from and 
to the same ports enumerated under the second section of this de¬ 
scription. In the main the detailed arrangements governing this 
pool are similar in character to those adopted for the regulation of 
the other pools. 

The several pools just described run for different periods of time, 
and the lines agree to forward their manifests and statements of 
freight to the acting Secretary (it was agreed that for the first three 
months of the pool the North German Lloyd’s Secretary was to act 
as adjuster, the other lines to follow in turn according to an agreed 
order) by the end of every month for the preceding month. All 
transactions with reference to the pool are kept on the European 
side; but, on the American side, it is asserted, the lines do not meet 
in regular conference. Instead, as the representative of one of the 
lines testified: “ The representatives meet every day on the Ex¬ 
change. They are all more or less good friends, and they come 
together perhaps in one of the offices or the other, but not on defi¬ 
nitely fixed dates. We discuss rates when we think it necessary.” 
(Vol. 1, p. 343.) 


74 FREIGHT AGREEMENTS IN THE AMERICAN-EUROPEAN TRADE. 


Mr. Paul Gottheil, representing the Scandinavian-American Line, 
testified (vol. 1, p. 343) that there exists in the westbound business 
of the Baltic lines a -spooling agreement similar in character to that 
adopted in the eastbound traffic, and that all the lines seek to charge 
the same rates in both directions, except where the lines can not 
maintain their allotted percentages. Should any line fall short of 
its percentage, it is expected that it will pursue a policy of forcing 
the flow of traffic similar to that adopted in connection with the 
steerage pooling agreements, i. e., lower its rates, or have the other 
lines raise their rates, until the full percentage is secured. 

Complaints filed with the Committee tend to show that the afore¬ 
mentioned pooling agreements have been instrumental in greatly 
increasing the rates on various American exports, especially flour, 
which item was made the basis of one of the pools. Prior to the 
agreement between the lines, the rates on flour to Christiania and 
Baltic ports were approximately on a level with those to Rotterdam, 
Antwerp and Hull. If the Hamburg-American Line at that time 
wished to compete with the Scandinavian-American Line running 
directly from New York to Christiania and Copenhagen, it was 
obliged to take flour at the same rate as the direct Scandinavian line 
and pay the local freight from Hamburg to Christiania/Copenhagen 
out of its own ocean freight. With the formation of the Baltic Pool, 
however, the rates to Christiania and Copenhagen, it is charged, were 
advanced even in excess of the full ocean rate from New York to 
Hamburg plus the local rate from Hamburg to Christiania/Copen¬ 
hagen, with the result that American flour exports to Scandinavian 
and Baltic ports have been practically eliminated. The excessive¬ 
ness of American export rates to Baltic ports, as compared with the 
rates to Continental and English ports, it is argued, are well illus¬ 
trated by the following rates quoted by “ The Northwestern Miller ” 
on March 5, 1913: 

New York to Christiania-31 cents 100 pounds. 

New York to Copenhagen-31 cents 100 pounds. 

New York to Gothenburg-33 cents 100 pounds. 

New York to Helsingfors-36 cents 100 pounds. 

New York to Wiborg and Abo-36 cents 100 pounds. 

New York to Bjorneborg-38 cents 100 pounds. 

New York to Wasa-38 cents 100 pounds. 









FKEIGHT AGREEMENTS IN THE AMERICAN-EUROPEAN TRADE. 75 


At the same time the freights to Continental and English ports 
were: 

New York to Rotterdam_20 cents 100 pounds. 

New York to Amsterdam_23 cents 100 pounds. 

New York to Bremen_20 cents 100 pounds. 

New York to Hull_22. 5 cents 100 pounds. 

New York to Liverpool_16. 88 cents 100 pounds. 

New York to Leith_22 cents 100 pounds. 

As compared with the rates from New York,-it should be noted 
that section 4 of the flour pooling agreement provides that: “It is 
agreed that the basis of flour rates is to be as follows: Baltimore, 
Newport News, Norfolk and Montreal, 2 cents per 100 pounds, and 
Philadalphia, 1 cent per 100 pounds, above New York and Boston, 
subject to such changes as the adjustment of tonnage may from time 
to time make necessary.” Such rates are considered prohibitive and 
so far above the world’s general freight market as to totally stop, 
for months at a time, the sale of one of America’s largest export 
articles to the markets of Scandinavia and Finland. “ During 
former years, previous to the formation of the Baltic Pool,” as one 
prominent flour dealer writes to the Committee, “American mills 
did a regular business with sales almost every day all the year round 
to these markets. After the Baltic Pool was formed it has happened 
that sales can only be made occasionally, when America has had a 
record crop, or can offer flour at exceptionally low prices. The con¬ 
sequence is that German and English mills have now secured the 
regular business which American mills formerly had to Scandinavia 
and Finland. In plain words, the Baltic Pool lines, through charg¬ 
ing exorbitant and prohibitive rates, are stopping the regular trade 
of American mills to these markets.” 

Agreements between lines operating to Scandinavian and Russian 
Baltic ports. —As already explained, the four lines belonging to the 
Baltic Pool have adopted a schedule of arbitraries in the American 
eastbound trade for all transshipments from the port of arrival to 
the final port of destination. A large number of local lines serve the 
numerous Baltic ports, and the information furnished to the Commit¬ 
tee tends to show that these lines have entered into agreements with 
each other. Thus, Mr. Norval Richardson, American Consular rep¬ 
resentative at Copenhagen, reports that the Scandinavian-American 








76 FREIGHT AGREEMENTS IN THE AMERICAN-EUROPEAN TRADE. 


Line is the only steamship company maintaining a direct route be¬ 
tween Danish and American ports, and that “ the different steamship 
lines devoted to carrying on trade only between Danish and Scandi¬ 
navian ports have agreements and arrangements among themselves 
for the purpose of allotting to each its sphere of activity, and for 
maintaining fixed freight rates.” (Yol. 3, p. 35.) 

Similarly Mr. William F. Doty, American Consul at Riga, Russia, 
reports that the steamship companies regularly engaged in the trade 
to and from Russian Baltic ports, have formed a combination known 
as the “ Northern International Transoceanic Traffic Association ” to 
regulate ocean traffic from northern Russia to northern Europe and 
trans-Atlantic ports. This combine comprises at least 21 lines (all 
enumerated on pp. 99-100 of vol. 3) operating to St. Petersburg, 
Reval, Riga, Libau, and Windau. This list includes the Hamburg- 
American Line, the United Steamship Company, and the Wilson 
Line, which are parties to the Baltic pool agreements already dis¬ 
cussed. It is also noteworthy that this combination includes the 
Russian East Asiatic Steamship Company, the lines having passed 
a resolution at their twenty-third conference, on November 5, 1912, 
to the effect that: 

The steamship line from Libau to New York of the Russian Asiatic Steam¬ 
ship Co. is permitted to trade between New York and Libau, Riga, and Windau, 
on the following conditions: The company will be required within four weeks 
to notify the managing director of the Northern International Transoceanic 
Traffic Association of its rates of freight, who will thereupon communicate them 
to the other interested steamship companies. If no protests are raised by these 
companies within eight weeks after receipt of the communication the admission 
of the Russian East Asiatic Co. to the trade will be considered as approved. 

While a copy of the agreement between the lines can not be ob¬ 
tained by the Committee, Mr. Doty describes the nature of the com¬ 
bine at length in his report of February 11, 1913, (vol. 3, pp. 96-100). 
According to his statement, the lines meet in conference (the next 
conference to be held at Hamburg in September or October of this 
year) for the purpose of fixing the rates and otherwise regulating 
the policy of the combination. The wide scope of the conference 
is well illustrated by one of the resolutions passed on October 5, 1912, 
to the effect that: 

Relative to a new line to be established by the United Steamship Co. of 
Copenhagen, from Spanish, Portuguese, Italian, and French ports to St Peters- 


FREIGHT AGREEMENTS IN THE AMERICAN-EUROPEAN TRADE. 77 

burg, the conference assents to an agreement being entered into with the above- 
mentioned steamship company, subject to a statement of the ports of call, the 
number of sailings, and the rates of freight. 

It also appears that at stated intervals the steamship lines’ repre¬ 
sentatives meet the delegates of the Russian State railroads, with 
which the combine has agreements relative to tariffs, and that these 
State railroads not merely officially recognize the combine, but favor 
the lines composing the same at the expense of independent com¬ 
panies. These favors take two forms, namely, (1) the railroads 
allow merchandise to remain in the cars from 14 to 30 days, depend¬ 
ing on the ports to which the freight is to be transported, in case 
the goods are to be shipped by a vessel belonging to the combine, 
whereas shippers by independent vessels must remove the freight im¬ 
mediately upon arrival, or pay heavy demurrage charges; and (2) 
there is in force a special railroad tariff in favor of certain classes 
of exports via Baltic ports, if shipped by vessels of the combine or 
by those flying the Russian flag. 

Owing to the combination of steamship lines and the relations be¬ 
tween these lines and the Russian railroads, ocean rates from north¬ 
ern Russian ports have remained remarkably steady for a number 
of years. Since 1912, however, there has been a considerable rise, 
the increase from Riga to the United States on flax and hemp, moist 
hides, dry hides, and rubber waste, being respectively, 13.1 per cent, 
26.1 per cent, 54.2 per cent, and 63.6 per cent. In summarizing the 
effects of the agreement Mr. Doty states: 

It may be confidently asserted that the policy hitherto pursued by the asso¬ 
ciation does not coincide with the interests of American importers, who are in 
the large majority of cases also owners of the merchandise shipped from the 
Russian seaports to the United States. There is a disinclination on the part 
of the lines forming the combine to lay on additional steamers at the ports of 
transshipment—London, Hamburg, Copenhagen, Hull—when trade is brisk 
and exports are heavy, with the consequence that goods remain for a consider¬ 
able length of time on the docks, exposed to all the inclemency of the weather. 
The loss to the importer through such delay must be quite heavy, and could 
well be avoided were these competing lines, or the shipping lines of the com¬ 
bine more attentive to the interests of the trade community. Quite recently 
goods shipped thither in transit to Boston lay for fully six weeks before being 
forwarded to their final destination. The agent of one of the leading members 
of the combine has stated to this consulate that he would prefer to see the asso¬ 
ciation dissolve rather than that the agreement be continued in its present 
form, but that the lines interested are averse to a change. 


78 FREIGHT AGREEMENTS IN THE AMERICAN-EUROPEAN TRADE. 

Lines operating between the United States and Norway. —Besides 
the Scandinavian-American Line, belonging to the Baltic Pool, only 
one other regular line engages directly in the carrying trade between 
the United States and Norway, viz., the Norway-Mexico Gulf Line 
with a westbound service from Christiania and Gothenberg via New¬ 
port News and Mexico to New Orleans and Galveston and a return 
service from Galveston via New Orleans to Christiania and Gothen¬ 
berg. In the eastbound traffic this line is in no sense a competitor 
of the Scandinavian-American Line, but both lines operate to New¬ 
port News on the westbound voyage. Westbound, therefore, the two 
lines are competitors as far as Newport News is concerned and the 
greatest possible lack of understanding is said to exist between the 
two lines, the Norway-Mexico Gulf Line having steadily refused to 
join either the North Atlantic or the Baltic Pools. Although the 
American representatives of the Norway-Mexico Gulf Line advised 
the Committee under date of October 11, 1912, that the line is not a 
party to any agreement or understanding with any other steamship 
line as regards either the freight or passenger business, Mr. L. S. 
Swenson, American Minister to Norway, reports that the line will 
enter into a traffic and sailing agreement with the recently organized 
Swedish-American Mexico Line, whose vessels will touch Norwegian 
ports. This last line, it is stated in the report “ will be a member of 
only such pools and combinations as the Norway-Mexico Gulf Line 
has joined, the two being banded together for mutual profit and 
protection.” (Vol. 3, p. 93.) Mr. Swenson further reports that 
another new line—the Norwegian American Line—expects to begin 
sailings between Christiania and Bergen and New York; and that “ the 
management has declared that it will not join the North Atlantic or 
Baltic Pools, but an effort is being made to effect an agreement with 
the Norway-Mexico Gulf Line and the Swedish-American Mexico 
Line.” 

Mediterranean Freight Agreements. 

Mediterranean Freight Traffic Agreement of December 15., 1911 
covering westbound trafic. —With the exception of the Fabre Line 
all the regular steamship lines engaged in the carrying trade be¬ 
tween Italy and the United States are parties to agreements covering 
both the westbound and eastbound traffic. The westbound traffic is 
governed by the agreement of December 15,1911, a copy of which was 


FKEIGHT AGKEEMENTS IN THE AMEKICAN-EUEOPEAN TBADE. 79 

furnished to the Committee by one of the interested lines. This 
agreement, (concluded for the period from January 1, 1912, to De¬ 
cember 31, 1916, and to continue thereafter from year to year unless 
notice of discontinuance is given by any line), was entered into by two 
groups of lines, viz.: Group 1, consisting of the six Italian lines on 
the one part—the Navigazione Generale Italiana, Italia, Veloce, 
Lloyd Italiano, Lloyd Sabaudo, and Sicula Americana—and, on the 
other part by Group 2, comprising the Anchor, Hamburg-American, 
North German Lloyd and White Star Lines. It is the purpose of the 
agreement to assure to each group of lines 50 per cent of the freight 
cargo loaded at all ports of Italy and Sicily to all ports in the United 
States and Canada. After deducting the amount of carrying freight 
and special rebates, as may be agreed upon by the lines, all net freight 
is to be divided on the basis of 50 per cent for each group. 

Eates of freight are definitely prescribed in the agreement for 
weight and measurement tonnage, and all rates are subject to the com- 

t 

missions granted by the lines to their agents, these commissions being 
prescribed in the agreement. A tariff of rates, to go into operation 
on January 1,1912, is agreed upon, and special rates may be arranged 
among the lines for transshipment cargo. The agreement also 
specifies that the minimum number of sailings of each group of lines 
sliall be 120. In case either group of lines should fall short of the 
minimum number of sailings prescribed, the percentage freight allot¬ 
ment of such group shall be reduced proportionately. The remain¬ 
ing provisions of this comprehensive agreement may be briefly sum¬ 
marized as follows: 

(1) Deferred rebates, not exceeding 10 per cent of the 
freight, are granted to shippers who agree to support only the lines 
which are parties to the contract. This rebate is payable by the Sec¬ 
retary of the Mediterranean Conference for a period of six months, 
and it is expressly provided that no rebates will be due to shippers 
for at least six months, and that the same shall be sacrificed by any 
shipper who shall have supported a competing steamer. The rebate 
payments are made only upon a written declaration from shippers, 
which shall declare that during the period no shipments in which they 
are directly or indirectly interested have been made by any com¬ 
petitive line. At each port the lines obligate themselves to prepare 
a statement, taken from shippers, as to the amounts due to each 



80 FREIGHT AGREEMENTS IN THE AMERICAN-EUROPEAN TRADE. 

separately for each steamer, which statement must be sent to the 
secretary of the conference, the same being accompanied by a 
check for the total amount of the rebates due. On receipt of this 
statement and check the assistant secretary shall remit the amount 
of rebate to the respective shippers. 

(2) With certain exceptions, expressly enumerated in the 
agreement, no freight contracts shall be entered into, at any of the 
ports, for shipments of goods to New York or other ports in the 
United States or Canada, excepting Boston. For Boston the con¬ 
tracts may be entered into only for a period of a year and at not less 
than the tariff rates agreed upon. Copies of all freight contracts, 
entered into prior to the making of this agreement, must be fur¬ 
nished to the secretary of the conference, and all cargo carried 
under such contracts must be pooled at the fixed tariff of rates estab¬ 
lished by the agreement. 

(3) Each line must forward to the secretary of the con¬ 
ference, within 20 days after the sailing of each steamer, a manifest 
showing the number and description of the packages and other 
freight, the weight in tons and measurement, the rate of freight, 
gross freight, deductions on account of rebates or special commis¬ 
sions, and the resulting total in freight. All such manifests must 
be checked by the secretary of the conference with the tariff of 
rates agreed upon with a view to seeing that proper returns have been 
made. Copies of such manifests must also be exchanged among 
agents of the lines at each port, or may be deposited within 10 
days after the sailing of the steamer with some party nominated 
by the agents, and remain there for inspection by the other lines or 
their agents. Manifests, however, need not include the names of 
shippers. 

Each month the secretary of the conference must furnish a state¬ 
ment to each line, showing the sailings of all the lines during the 
previous month, the amount pooled, and the position of each line 
or group in comparison with its allotted share. In case a line has 
overcarried its proportion, it must “ regulate its carrying as near as 
possible to its share, so that the amount to be paid to, or to be re¬ 
ceived from, the pool shall be as small as possible.” 

(4) New lines may be admitted to the pool by unanimous 
consent only, and upon admission of a new line the percentage 


FKEIGHT AGREEMENTS IN THE AMERICAN-EUROPEAN TRADE. 81 

allotted shall be contributed pro rata by all the other lines or groups. 
Similarly, as regards the contract, alterations and new conditions can 
only be effected by the unanimous vote of all the lines. 

(5) For the faithful performance of the conditions of the 
contract each line must deposit with the secretary of the conference 
a bank guaranty amounting to 50,000 lires. The bank guaranty of 
the separate lines answers for the whole group to which the lines 
belong so far as compensation payments are concerned. Provision 
is also made that the total sum deposited by a line shall be considered 
the amount of liquidated damages and entirely forfeited if the line 
unduly withdraws from the present contract before its expiration, 
or resorts to any actions which make the continuance of the contract 
impossible, such as refusing to pay compensation money, or assisting 
directly or indirectly an existing or a new opposition line. A penalty 
of at least 5,000 lires is imposed for each infraction of any stipula¬ 
tion of the contract, the penalty in any case, however, not to exceed 
the total amount deposited by the line at fault. Where, however, the 
infraction is willful and designed, especially in relation to the fur¬ 
nishing of traffic statements, the penalty is increased to at least 25,000 
lires. Unless the penalty is paid within eight days after the render¬ 
ing of an award, the deposit will be drawn upon to the amount of 
the penalty. The deposit, following the payment of a penalty, must 
be fully replenished within 14 days. 

(6) The government adopted for the execution and control 
of the fulfillment of the conditions of the contract is intrusted to 
(1) the general secretary and assistant secretary, (2) the delegates 
of the lines, and (3) the arbitrators. Mr. H. Peters, who is also the 
secretary of the various passenger conferences, is appointed the 
general secretary. His duties are similar to those described in the 
passenger agreements. Meetings of the lines are to be held, if possi¬ 
ble, at least once each six months, and the delegates ofithe lines to 
the conference must have full power to make binding arrangements 
on behalf of their companies and to sign for the same. Decisions, 
unless otherwise provided for, must be taken by a majority of four- 
fifths of the lines, and each line has a vote only on questions con¬ 
nected with the agreement to which it is a party. No line has the right 
to summon any other line before the law courts, but all differences 
which can not be amicably settled must be referred to arbitrators, 

25655®— VOL 4—14-6 



82 FREIGHT AGREEMENTS IN THE AMERICAN-EUROPEAN TRADE. 

Each line chooses an arbitrator and the two arbitrators thus chosen 
must select an umpire from a list of three individuals specified in the 
contract. All the details of arriving at the award are similar to 
those prescribed in the Mediterranean Passenger Agreement. It is 
also expressly stipulated that the award of the arbitrators is equiva¬ 
lent to a legal judgment against which all right of appeal is ex¬ 
hausted and which all the parties to the contract agree to accept 
without resorting to any other legal means. 

(7) No communications relative to transactions or resolu¬ 
tions governing the contract can be made to the press or any outside 
party without the unanimous consent of all the lines. 

(8) Article 25 of the Agreement stipulates that special con¬ 
tracts shall be made with the Austro-Americana, the Cunard Line, 
and if possible, Messrs. Peirce and Vapuccio and Becker, each of the 
two groups of lines to the contract to bear its percental share of the 
payments to be made or received in the contract. Article 27 provides 
that the Austro-Americana and Cunard Line become parties to this 
agreement in its terms and conditions for their western Italian and 
Sicilian trade; and that the percentages allotted are 12 per cent to 
the Austro-Americana, and 7 per cent to the Cunard Line, based upon 
the traffic of all the parties to the agreement. To obtain these per¬ 
centages the Austro-Americana must effect a minimum of 40 sailings 
and the Cunard Line 26 sailings. In the event, however, that either 
line should be short of the agreed minimum, these percentages are to 
be reduced proportionately. 

Mediterranean Eastbound Freight Agreement .—In its reply to 
the Committee’s Schedule of Inquiries, the Anchor Line states that: 
“ The trans-Atlantic Lines have an understanding as to minimum 
rates of freight eastbound to the Mediterranean.” This understand¬ 
ing, according to Mr. W. G. Sickel, is not in writing, but the agents 
of the lines meet at irregular intervals to discuss eastbound rates. 
These rates, Mr. Sickel testified, “ are made in New York at the 
judgment of the representatives of the lines without any dictation 
from abroad as to what the rates shall be ” (vol. 1, p. 557). While 
there is no legal obligation on the part of any of the agents to respect 
the gentlemen’s agreement between the lines, Mr. Sickel testified 

that the rates are changed only by common consent and that there 
“ might be something of a moral obligation ” to observe the estab¬ 
lished rates (vol. 1, p. 555). He also expressed his belief that the 


FREIGHT AGREEMENTS IN THE AMERICAN-EUROPEAN TRAPE. 83 


Eastbound Agreement comprises all the lines running regularly to 
the Mediterranean. 

Effect of Mediterranean Agreements upon Freight Rates. —A num-'^ 
ber of complaints were filed with the Committee, protesting against 
what are called unreasonable advances in rates which have been 
made since January 1, 1912,. when the present Westbound Mediter¬ 
ranean Freight Agreement went into effect. Two important in¬ 
creases in rates have occurred, namely, those of January 1 and 
November 1, 1912. Thus, an examination of the rates, before and 
after the increase of January 1, 1912, on 24 leading articles exported 
from Naples to the United States, shows that the increase varies from 
a minimum of 5 per cent to a maximum of 84 per cent, the increase for 
all the articles averaging nearly 30 per cent (vol. 3, pp. 78 and 79). 
Another communication from Florence, Italy, asserts that exporters 
to the United States are suffering from an increase in rates varying 
from 50 per cent to 400 per cent of those in force prior to 1912, 
and that in addition to the increase in rates a 10 per cent cappa was 
imposed. 

A special Committee on Ocean Freight Fates, appointed by the 
Board of Directors of the Italian Chamber of Commerce in New 
York, reported that, although a substantial increase had already 
taken place on January 1, 1912, over the rates in force the previous 
year, “ all freight rates to and from the United States have been 
uniformly raised (since November 1, 1912) by all steamship lines j 
to an extent ranging from 20 to 40 per cent over the rates which ■ 
went into effect on January 1, 1912” (vol. 2, p. 1176). This Com¬ 
mittee further reported that the steamship companies arbitrarily ■ 
increased their rates of freight “ without giving due notice to the \ 
trade, thus causing enormous losses to importers on contracts for ] 
future deliveries that were based upon the rates of freight in force j 
at the time of making such contracts previous to the said increase.” ! 
It is also charged by this Committee that the lines cause discrimina¬ 
tion between shippers by the granting of special commissions and 
rebates, and that, despite the large increase in freight rates, the 
service given by the lines continues unsatisfactory as regards the 
regularity and number of sailings, the care exercised in the handling 
of the goods, and the settlement of just claims with shippers (vol. 

2, p. 1177). 



84 FBEIGHT AGREEMENTS IN THE AMERICAN-EUROPEAN TRADE. 

Other Mediterranean Freight Agreements, —In addition to the 
foregoing agreements relating to the Italian traffic, the Committee 
has received information from various sources tending strongly to 
confirm the existence of agreements or cooperative understandings 
between other groups of lines operating between Mediterranean 
ports and the United States. At least four such agreements or 
understandings are indicated by this information. It should be 
stated, however, that practically all the lines involved have ignored 
or declined to answer the Committee’s Schedule of Inquiries, and 
that the Committee therefore lacks positive proof of the existence 
of these agreements. The following is an outline of the agreements 
referred to, and the source of the Committee’s information: 

1. In his report to the Committee the American Ambassador to 
Italy, Mr. T. J. O’Brien, states that he has been reliably informed 
that a freight pooling arrangement, similar in character to the 
Mediterranean pooling agreements already described, exists between 
the Creole Line, Peirce cargo boats, Cunard Line, and the National 
Steam Navigation Co. of Greece. (Vol. 3, p. 62.) Apparently 
the only regular line outside of the pools involving the Italian traffic 
is the Fabre Line which, it should be stated, is the only steamship 
line maintaining a regular service between southern France and 
the United States. Mr. Cyrus E. Wood, American Ambassador to 
Portugal, also reports that this line is the only one regularly and 
directly engaged in the carrying trade between Lisbon and the 
United States. The officials of this line advised the Committee that ' 
the company “ is a member of the Mediterranean Conference for 
mutual information, but is in no agreement in connection with the 
same.” But, while having refused to join the pool, Mr. W. G. 
Sickel testified in connection with the eastbound Italian Freight 
Agreement that the line “ rarely touches Italian ports, and when¬ 
ever it does, it generally adheres to the rates of the so-called con¬ 
ference lines.” (Vol. 2, p. 839.) 

2. Between Spain and the United States a considerable part of the 
traffic is carried by non-Spanish lines, transshipping at Hamburg, 
Marseille and other European ports, or by Austrian and French 
steamers which occasionally stop at Barcelona while en route 
between New York and Trieste. The direct through freight serv¬ 
ice is confined to two Spanish lines, viz, The Compania Trans- 


FREIGHT AGREEMENTS IN THE AMERICAN-EUROPEAN TRADE. 85 

atlantica, with monthly sailings from Barcelona, Valencia, Malaga, 
and Cadiz to New York, and the Pinillos Line, operating from the 
same ports via the Canary Islands, Porto Rico, and Cuba to New 
Orleans and Galveston. According to the report (vol. 3, p. 101) of 
Mr. Henry H. Morgan, Consul General at Barcelona, 

An agreement was formed about eight years ago between the Compania 
Transatlantica, Linea Pinillos, and the Compania de Navigacion Transatlantica 
to put an end to the former system of cutting rates between these companies, 
and a schedule of rates to be charged by each of these companies for freight 
_ and passengers was agreed upon. Allowance was made in fixing these rates 
for the larger boats and more rapid service of the Compania Transatlantica. 
Rates were to remain in the same proportionate scale or be changed by mutual 
consent as long as this arrangement remained in force, and, according to my 
information, it still exists and is binding upon the Pinillos and Transatlantica 
companies. About three years ago the third company to the agreement, the 
Compania de Navigacion Transatlantica, ceased to exist. 

Although this agreement I am informed is of documentary character, 
it is regarded as strictly secret, and is in the possession of the heads of the 
respective companies only, so that it has been impossible to obtain a copy or 
even an inspection of the agreement to substantiate the statements made to me. 
I may add that not only the local clearing agent of the Transatlantica company 
but also the main office of that company deny any knowledge of such an agree¬ 
ment as the above. My opinion, however, is decidedly in favor of the existence 
of the agreement. 

3. Between the Austrian ports on the Adriatic and the United 
States two regular lines control the traffic, viz., the Cunard Line from 
Fiume, and the same line and the Austro-Americana from Trieste. 
Under date of December 5, 1912, the Cunard Line furnished to the 
Committee its published rates of freight from Trieste to New York, 
effective from the 1st of April, 1912, but subject to change without 
notice. These rates were the same as those published in the West¬ 
bound Freight Tariff of the Austro-Americana Line, which likewise 
became effective.in April, 1912. Mr. R. J. Totten, American Consul 
at Trieste, reports under date of October 31, 1912, that these com¬ 
panies have agreed upon a new minimum freight tariff to go into 
effect about January 1, 1913, and involving a slight advance in the 
general level of rates (vol. 3, p. 22). The Committee has also been 
advised that the lines operating from Trieste and Fiume give much 
lower rates to Austrian exporters than are enjoyed by the exporters 
of Italy, but that “ if Italian goods are sent to these ports for ship¬ 
ment they are refused acceptance ” (vol. 3, p. 83). 


86 FEEIGHT AGREEMENTS IN THE AMEEICAN-EUROPEAN TRADE. 

- (4) Only one line plies directly between New York and the Le-* 
vant, namely, The America-Levant Line. At present this line op¬ 
erates only as far as Smyrna but, in view of arrangements now under 
way, will soon run steamers to Constantinople and certain Black Sea 
ports. Thirteen other lines, however (enumerated on p. 107 of vol. 
3), accept goods from New York for the Levant with transshipment 
at Liverpool, Hamburg, Bremen, Havre, Marseille, Naples, Genoa, 
Patras and Piraeus. With two exceptions these lines are parties 
to the Mediterranean Eastbound and Westbound Freight Agree¬ 
ments. Furthermore, Mr. Gabriel Bie Bavndal, Consul General at 
Constantinople, reported to the Committee the following facts (vol. 
3, p. 108): 

I am informed by several local steamship agents that there is an agreement 
between all the lines accepting goods at New York, Boston, and Philadelphia 
for Levant ports, with the exception of the Fabre Line and the National Steam 
Navigation Co. of Greece, for the purpose of regulating and controlling freight 
rates. I am not able to state whether or not the America-Levant Line is 
included within this agreement, but as this line has informed me that they 
adopt the same tariff from the Levant to United States ports, as do the lines in 
the “ Liverpool Agreement,” it would appear that they follow the same practice 
in regard to rates on freight shipped from United States ports to the Levant. 

I inclose herewith a copy of a tariff of freight rates entitled “ Freight rates 
from Atlantic ports to Levant and Black Sea,” which took effect in April, 1912, 
and which is subject to change without notice. The fact that identical copies 
of this tariff of freight rates were handed to me by several local steamship 
agents is further proof that such an agreement exists. Freight rates were 
increased in December, 1911, and again in April, 1912, on account of the Italo- 
Turkish War and of the high price of coal and fuel, as well as the general 
expansion of the trade of the world. It is believed by local agents that this 
agreement exists primarily in order to put into effect uniform freight tariffs, 
and that it is not for the purpose of pooling or dividing the earnings of the 
several lines which operate independently of each other in this respect. No 
rebates are given by local steamship agents on goods shipped to this market 
from United States ports. 

In the westbound traffic a large number of lines accept goods at 
Constantinople for New York, Boston and Philadelphia with trans¬ 
shipment at various European ports. This indirect traffic is con¬ 
ducted by three groups of lines, viz., the Cunard, Moss, Pappayanni, 
and Ellerman Lines (so-called “ Liverpool Lines ”), with transship¬ 
ment at Liverpool by the Cunard and White Star Lines: the German 
Levant Line with transshipment at Hamburg and Bremen by the 



FREIGHT AGREEMENTS IN THE AMERICAN-EUROPEAN TRADE. 87 

Hamburg-American Line and North German Lloyd Line; and a 
large number of local Mediterranean lines with transshipment at 
Marseille, Patras, Piraeus, Trieste, Naples and Genoa by the Fabre 
and Greek lines, as well as practically all the companies which have 
been enumerated as parties to the Mediterranean Freight Agreement. 
(For a full enumeration of all the lines engaged in this traffic see 
vol. 3, pp. 109 and 110.) 

The four Liverpool lines—the Cunard, Moss, Pappayanni, and 
Ellerman Lines—have entered into an agreement for the purpose of 
preventing competition between the lines and of controlling the 
freight rates on goods destined to America with transshipment at 
Liverpool. Sailings of the respective lines are so controlled that 
there is always at the port of Constantinople a cargo steamer belong¬ 
ing to one of the four lines. This practice of rotating the steamers 
gives the Liverpool lines a decided advantage over competitors in 
loading and unloading facilities, insofar that their steamers are 
always ready to accept freight as soon as loaded aboard the lighters, 
whereas nonconference steamers are often late in their schedules, 
thus entailing, in view of the absence of adequate storage depots at 
Constantinople, heavy demurrage charges, as well as risk to the 
freight through exposure to the elements. Until recently, also, these 
lines sought to compel local exporters to ship exclusively over their 
lines to America by granting annually a deferred rebate of 2s 6d 
per ton on all shipments during the preceding year. Such rebates, 
granted for a period of about 10 years, were recently discontinued; 
and it is claimed that at present no rebates are granted by any of the 
lines operating in the American trade from Constantinople (vol. 3, 

p. 110). 

With reference to the Mediterranean lines engaged in the west¬ 
bound traffic from the Levant to the United States, Mr. Ravndal 
reports that: 

Although there is no pool or formal agreement among the lines traversing 
the southern or Mediterranean route, the majority of these lines follow more 
or less the standard of freight rates set by the four companies in the Liverpool 
Agreement. The southern lines are not, however, obliged to follow the Liver¬ 
pool standard of rates, and local agents occasionally cut their own rates from 
10 to 20 per cent in order to secure an especially large shipment of goods, or 
if they are in need of cargo for their vessels. The National Steam Navigation 
Co. of Greece, which operates directly between New York and Piraeus, and 


88 FEEIGHT AGREEMENTS IN THE AMERICAN-EUROPEAN TRADE. 


which lately absorbed the Hellenic Trans-Atlantic Line, maintains a standard 
of rates which is from 20 to 25 per cent lower than the rates adhered to by the 
other lines. The reasons for this rate cutting are that the National Steam 
Navigation Co. of Greece is very anxious to secure more cargo because the 
Greek ports do not afford sufficient traffic for the United States, and further¬ 
more because they are able to operate their steamers on a much cheaper basis 
than do the other lines. The America-Levant -Line, a company recently or¬ 
ganized and which has just put into effect a schedule of direct sailings between 
New York and Smyrna, has not yet perfected its tariff of freight rates and for 
the present is accepting goods for shipment to America at the same rate as do 
the “ Liverpool lines.” 

None of the lines in the Liverpool Agreement, it should be added, 
publish a list of freight rates for distribution among shippers, and 
rates must be obtained through personal inquiry at the steamship 
offices. The printed tariff furnished to the Committee was marked 
Private—For use of Liners’ agents only,” and showed that the rates 
on all commodities are the same over all the lines. The Committee 
was also advised that between November, 1911, and April, 1912, the 
rates on all commodities shipped from New York and other Atlantic 
ports over the lines in the Liverpool Agreement advanced from 20 
to 40 per cent; and that a corresponding advance occurred on ship¬ 
ments in the westbound traffic, (vol. 3, p. 113). YTiile this large in¬ 
crease is partly traceable to the war risks and the increased cost of 
coal, the opinion is prevalent among merchants that these high 
freight rates tend to discourage commerce between the United States 
and Turkey. (Vol. 3, p. 113). It is also interesting to note, as re¬ 
ported by Mr. Kavndal, (vol. 3, p. 112) that: “An examination of 
the inclosed ‘ Constantinople homeward tariff ’ of the Liverpool lines 
will show that whereas the rates from Constantinople to New York, 
Boston, and Philadelphia are from 10 to 100 per cent more than from 
Constantinople to Liverpool direct, the rates on commodities shipped 
to America in large quantities, between Constantinople and New 
York are either the same as or from 10 to 25 per cent cheaper than 
the rates on the same commodities between Constantinople and Lon¬ 
don. These rates to America, on the above-mentioned products, are 
maintained in order to compete with the lines which carry the same 
commodities over the shorter southern routes.” 


FKEIGHT AGKEEMENTS IN THE AMERICAN-EUROPEAN TRADE. 89 

The Existence of Deferred Rebates in the Trade Between the United 

Kingdom and the Ports on Puget Sound and the West Coast of 

Canada. 

Several importing and exporting firms located on the American 
Pacific coast have called attention, in letters addressed to the Com¬ 
mittee, to the adoption of deferred rebate agreements by some of 
the foreign steamship companies engaged in the trade between the 
United Kingdom and northern Pacific ports. One of these firms— 
an exporting house at Seattle—refers under date of March 31, 1913, 
to the existence of a conference between the lines engaged in this 
trade on the outbound voyage. “The arrangement,” according to 
the letter, “ sometimes accrues to the benefit of the shipowner, but 
just as often to the benefit of the shipper, and we have in mind par¬ 
ticularly the canned-salmon trade to Liverpool from the north 
Pacific coast last year. The conference lines fixed the rates at 42/6 
and 45/- per ton of 2,240 pounds, less a 10 per cent deferred rebate^ 
to Liverpool and London respectively^ and these rates are in effect 
until July of this year. No sooner had the conference lines put 
these rates into effect than freight markets all over the world made 
a substantial advance, and the conference lines would, under differ¬ 
ent circumstances, have been justified in advancing the rates 7/6 
to 10/- per ton. Of course, on the other hand, freights might have 
dropped, and the shoe would have been on the other foot, but, taking 
a broad view of the whole matter as merchants, we believe we can 
conduct our business with better results by having established rates 
of freight in preference to throat-cutting competition.” 

Another communication from a large importing house on the 
Pacific coast explains that, owing to the establishment of several 
regular lines of steamers from Europe to the American Pacific coast, 
it has been importing considerable quantities from England. These 
steamer lines, it is asserted, have generally charged moderate rates 
of freight, owing to competition, especially from sailing vessels. 
“ There can be do doubt,” according to the letter, “ that it is the 
aim of these companies to organize a so-called conference in the 
end, and that if other steamer lines should come into the market 
for these voyages, there would very probably be a fight, with the 
usual result of the survival of the fittest.” Special attention is 
called to the fact that the companies have already inaugurated the 


90 FKEIGHT AGEEEMENTS IN THE AMEMCAN-EUKOPEAN TRADE. 


deferred rebate system as regards imports to the northern Pacific 
ports, and the fear is expressed that the same practice may also 
soon be applied to the voyage to San Francisco. The following is 
a copy of the printed deferred rebate circular sent out by the brokers 
of the Harrison Direct Line, and furnished to the Committee by the 
above-mentioned importing firms: 

Haerison Direct Line. 

BETTISH COLUMBIAN AND PUGET SOUND PORTS. 

Exporters of goods from the United Kingdom to any port on the west 
coast of Canada or in Puget Sound, who, from the 1st April, 1913, to 30th 
September, 1913, have found it to their interest to confine their support and 
shipments to these ports to the steamers of the Harrison Direct Line, will 
be allowed a rebate of 10 per cent off the freights contributed during that 
period, provided only that such support and shipments are continued to 31st 
December, 1913. 

Exporters applying for returns, which will be paid at this office on and after 
31st December, 1913, will please to fill up and sign forms which may be had 
upon application. 

Exporters failing to apply for returns within three months of the time when 
payment becomes due forfeit their claim thereto. 

No returns, immediate or deferred, other than the above will be allowed on 
shipments to the above-mentioned ports. 

Until further notice shipments made by the steamers loaded by Messrs. 
Alfred Holt & Co., or to the east coast of the United States or Canada, and 
thence overland by rail, or via the Isthmus of Panama, or via the Isthmus 
of Tehuantepec, will not invalidate claims for this rebate. 

For the Harrison Direct Line. 

Richard Bulman & Co., 

Loading Brokers, 

Mersey Chambers, 

Liverpool, 18th March, 1913. 


\ 

CHAPTEK III. 

AGREEMENTS IN THE AMERICAN-AERICAN TRADE. 


Understanding Between the Lines Operating to South and East Africa. 

According to the signed memorandum, submitted to the committee 
in answer to its schedule of inquiries by the Bucknall Steamship Lines 
(Ltd.) and the Union Castle Mail Steamship Co., and concurred in 
by the other lines in the trade, all the steamship companies engaged 
in the direct trade from the United States to the ports of south 
and east Africa—viz, the American & African Steamship Line (oper¬ 
ated jointly by the Bucknall Steamship Lines (Ltd.) and the Union 
Castle Mail Steamship Co.), the Union Castle Mail Steamship Co. 
(Ltd.), the Union Clan Line, the Hansa Line of Bremen, the Houston 
Line, and the Prince Line—are operated on the basis of an oral 
pooling arrangement, the particulars of which are based upon the 
previous agreement which expired in 1909. The original agreement 
in this trade followed a series of rate wars covering a period of about 
eight years, the fighting rates at one time declining for a period of 
nine months to as low as 10s. While these rate wars lasted American 
goods were carried at rates much lower than those from the United 
Kingdom. ^Ir. Douglas Owen testified before the Royal Commission 
on Shipping Rings that “ generally speaking, during this period rates 
were one-half to one-third lower than the rates from the United 
Kingdom.” It was also the opinion of the Royal Commission that 
these low rates tempted importers in South Africa to place orders 
with American manufacturers which otherwise would have been 
placed in England, thus enabling them to obtain a footing in the 
South African trade. The Hansa Line was admitted to the agree¬ 
ment in 1901, and the Houston and Prince Lines, which began their 
opposition in 1902 and continued the same until 1904 and 1905, were 
admitted in January, 1904, and June, 1905, respectively. With a ces¬ 
sation of the rate wars waged by the Houston and Prince Lines, the 

91 



92 


AGKEEMENTS IN THE AMERICAN-AERICAN TRADE. 


rates and tariff classifications from the United States have been 
readjusted to correspond approximately with those issued by the 
lines trading from the United Kingdom. 

The main particulars of the present working arrangement may be 
briefly summarized as follows: 

(1) The total tonnage required by the trade is furnished by the six 
lines in the proportion of two-sevenths for the Union Castle Mail 
Steamship Co., by reason of the fact that it is an amalgamation of 
two companies, viz, the Union Steamship Co. (Ltd.), and the Castle 
Mail Packet Co. (Ltd.), and one-seventh each for the remaining five 
lines. There is no division of traffic nor a territorial division of 
routes. No understanding exists for the discontinuance of any 
service or for limiting the time or number of sailings. Steamers are 
provided by each line in turn as the trade may require. The object 
of the pool is to have the several lines furnish all the tonnage needed 
for the trade at regular intervals and in the proportions referred to 
above. Freight money collected by the agents is transmitted to the 
principals of the several lines and is pooled abroad on the basis that, 
after provision is made for certain payments to meet the cost of run¬ 
ning the steamers, the balance is divided in such a manner that each 
line obtains in the apportionment practically the amount earned by 
its steamers. The New York representatives of the lines, as explained 
by Mr. Paul Gerhard and Mr. William E. Halm, representing, re¬ 
spectively, the Prince and Houston Lines, exercise no discretion what¬ 
ever in the loading of steamers, all orders coming from the London 
Conference, whose policy it is to keep only one steamer on the berth 
and to have the tonnage equitably divided between the lines. In their 
statements to the committee the representatives of the lines have con¬ 
tended that this pooling arrangement has resulted in a much more 
efficient, frequent, and regular service than formerly existed, and that 
American shippers now have the advantage of three or four dis¬ 
patches a month, or more if necessary, thus enabling them to order 
their goods from the interior in any quantity and as often as they 
please, with the assurance that upon arrival at New York the freight 
will be promptly cared for. As stated in the Union Castle Mail 
Steamship Co.’s report to the committee— 

The object of the arrangement is to conduct the trade with regularity and 
frequency of sailings to meet the requirements of American shippers; other- 


AGREEMENTS IN THE AMERICAN-AFRICAN TRADE. 


93 


wise, owing to the small interest of each line, the trade would be carried on 
with great irregularity. American shippers have expressed their strong desire 
for a regular and frequent service. The lines initiated the steamship service 
from New York to South African ports 20 years ago, and it has undoubtedly 
helped greatly in the development of the American trade with that quarter of 
the globe, and has been appreciated by merchants generally. 

It should also be noted that this pooling arrangement governs only 
the loading and operation of vessels from New York to South and 
East Africa. When discharged at African ports, it is every line’s 
own problem to get the steamer back to New York or to substitute 
another steamer in the trade. The principals in London make such 
arrangements as they see fit to place steamers as per their allotted 
percentage, and it is not necessary that the same steamers remain 
occupied in the trade. There is practically no return cargo to the 
United States, owing to the comparative absence of agricultural and 
manufacturing industries in South and East Africa. Practically the 
entire exports are confined to freight which is small in volume, 
although very valuable, such as diamonds, gold, ostrich feathers, etc., 
and a limited amount of wool and grain, and almost all of this cargo 
destined to the United States is carried by the mail steamers to 
Southampton and then transshipped to steamers running from South¬ 
ampton to New York. It therefore follows that the New York 
steamers, after discharging at South and East African ports, may be 
sent to England, India, Australia, or the River Plate, the principals 
in London supplying some other steamer for the next sailing from 
New York. 

(2) The rates are made in London and are sent or cabled to New 
York and put into effect by the agents there. These rates are uni¬ 
form for all the lines and to all shippers, and are based on the pre¬ 
vailing rates charged by European services to South and East Africa. 
All the witnesses who appeared before the committee in the interest 
of the South and East African trade have testified that the rates 
charged by the conference lines are maintained at the same level as 
from Europe; that there is no discrimination against American ship¬ 
pers in favor of European markets; and that it is the understanding 
between the lines that rates from the United States shall be main¬ 
tained as nearly as may be possible on the same level as those charged 
from British or continental ports, due regard being had to the rela¬ 
tive classification of goods in the United Kingdom and Europe and 


94 


AGREEMENTS IN THE AMERICAN-AFRICAN TRADE. 


the United States. This parity in rates, as testified by Mr. Paul 
Gottheil, representing the Hansa Line, has always been insisted upon 
by American shippers in order to meet European competition. Yet 
Mr. Gottheil and a number of other witnesses expressed their belief 
that the conditions of the trade justified a higher rate of freight from 
New York than is being charged from Europe. Briefly summarized, 
this belief is based on the following facts: 

{a) There is practically no return cargo from Africa, and the ves¬ 
sels are obliged to work their way back by way of India or Australia 
to Europe, and from there must proceed mostly in ballast in order to 
re-enter upon the New York service. The expenses involved, Mr. 
Gottheil placing the expense from Europe at $6,000 per steamer at 
the least, naturally makes the American freight rate to South Africa 
higher than it would be if there were return cargo. 

(h) All cargoes from Europe to Africa are of a much more miscel¬ 
laneous character than is the case from New York, and the freight 
earnings of a ship loading from New York are therefore naturally 
lower. Many American cargoes consist chiefly of rough freight, 
such as case oil, lumber, rosin, etc., which pay relatively a much lower 
rate of freight than the higher grades of cargo from European ports. 

{c) The much higher port charges at New York, as compared with 
European ports, are also declared to be a material factor. Leaving 
out of account such charges as pilotage and tonnage dues, which are 
also higher, attention is called to the heavy pier rentals prevailing at 
New York, ranging from $60,000 to $150,000 per year, and the addi¬ 
tional handicap involved in the difference in wages in New York 
as compared with Europe for the loading and unloading of vessels. 

All the factors just enumerated, it is argued, show that American 
shippers are treated very favorably when the lines serving them 
agree to keep their rates to the African market on a parity with 
those from Europe. Mr. William E. Halm, manager of the Houston 
Line, testified (vol. 1, p. 275), concerning the improbability of the 
conference lines discriminating against American shippers, that— 

nearly every large concern in the United States doing business to South Africa 
as well as other ports of the world, maintains offices in the principal capitals 
of Europe—London more often than other capitals. These commission houses 
act as buying agents for the firms in South Africa, and, acting in that capacity, 
they place orders with manufacturers in England and in Germany as well as 


AGREEMENTS IN THE AMERICAN-AFRICAN TRADE. 95 

in the United States, and these commission houses ship the goods. They must 
of necessity know of the rates and the arrangements from each country. If one 
of these firms, shipping from England, were to get special rates from there, 
they would very quickly insist on getting the same special rates from the 
United States. 

Similarly, Mr. Paul Gottheil, representing the Hansa Line, 
testified: 

It should be stated definitely that the Prince Line, which has a service both 
to Africa and Brazil, has no European service to those ports.' Now, just to 
counteract statements to the effect that there is a Shipping Trust, that the 
business is divided between the different lines, and that it is regulated by 
European infiuences, I am quite certain from my knowledge of Mr. Knott, the 
manager of the Prince Line, that if ever any question arises as to the question 
of rates being equal from the United States as compared with Europe, he will 
work in favor of the American rate being lower, because it is to his interest. 

(3) There is no deferred rebate system in the trade at present, 
although such rebates were granted until a few years ago. Accord¬ 
ing to the testimony of Mr. Herbert Barber (vol. 1, p. 429), the 
granting of deferred rebates was abandoned for fear that legal com¬ 
plications w^ould result if the practice continued. It also appears 
that provision was made in the recent agreement between the South 

• African shippers and the regular lines trading to the Union ports 
of South Africa that— 

the rates of freight shall be the present berth rates of freight (with 5 per 
cent primage in respect of the mail steamers only), but without rebates for all 
descriptions of cargo. 

(4) Two conferences exist in the trade for the conduct of the 
business operations of the several lines, viz, the London Conference 
and the New York committee. The London Conference, consisting 
of the principals of the lines, names the steamers that are to be 
loaded in turn, and controls absolutely the operation of the steamers 
engaged in the trade. (Vol. 1, p. 271.) All rates are issued from 
London, and no rate may be changed except on advice from London. 
(Vol. 1, p. 429.) In other words, the instructions from London are 
so definite as to allow no latitude to the New York representatives 
of the lines, whose duty it is to carry into effect the instructions 
received from London. With the exception of the Prince Line, all 
the lines operating from New York are also parties to eith'er the 
South African Outward Conference or the South African Home- 


96 


AGBEEMENTS IN THE AMEEICAN-AFKICAN TKADE. 


ward Conference, governing, respectively, the trade from and to 
the United Kingdom as regards South Africa. (See vol. 2, p. 3, 
of the Report of the Royal Commission on Shipping Rings.) 

While the New York agents of the lines have not been delegated 
any discretionary powers, they are nevertheless organized in a so- 
called New York committee. The agents meet in the different offices 
of the lines once a week to report the progress of the loading of the 
steamers and to arrange incidentals in connection with the business. 
If certain rates ought to be lowered or raised, the matter is dis¬ 
cussed in this committee, and recommendations are referred to the 
London Conference, which in due course approves or rejects the 
same. The agents also meet to compare notes as to the position of 
the steamers, to report contracts with shippers, and to put into 
effect any instructions in regard to rates which may have been 
received from London. 

(5) All contracts with shippers are made for the account of all 
the lines in the agreement, each carrying its proportion of the con¬ 
tract freight as it is tendered from time to time. The testimony 
before the committee shows that such contracts have been entered 
into with various large American corporations, such as the Standard 
Oil Co., the New York Lubricating Oil Co., the Union Carbide Sales 

( 

Co., and the International Harvester Co. Using the contract be¬ 
tween the New York Lubricating Oil Co. and R. P. Houston & Co. 
for illustrative purposes (Mr. Halm advised the committee that the 
terms and conditions of this contract are exactly the same as in the 
contract with the Standard Oil Co.), it appears that the oil company 
contracts with R. P. Houston & Co., as agent for aU the South 
African lines, for freight room for all shipments to Cape Town, 
Mossel Bay, Algoa Bay, East London, Port Natal, and Delagoa Bay 
during the next two years from date at the freight rates specified in 
the contract. At the expiration of the two-year period, the contract 
is to continue indefinitely, subject to termination at any time there¬ 
after by a nine months’ notice in writing by either party to the con¬ 
tract. R. P. Houston & Co., on behalf of the lines, agrees to furnish 
at least one steamer per month for all the ports mentioned, except 
Mossel Bay, during the term of the contract, and the oil company 
agrees to announce the quantity of cargo to be shipped in ample time 
to allow for the proper supply of tonnage. All shipments must be 


AGREEMENTS IN THE AMERICAN-AFRICAN TRADE. 97 

made in steamers named by R. P. Houston & Co., and it is agreed 
that— 

should the lines mentioned make a contract during the period of this contract 
for the transportation of similar articles to those mentioned in this contract 
at rates lower than those mentioned above, the New York Lubricating Oil Co. 
shall be ^iven the benefit of such reductions on the same goods by the said 
steamer or steamers that carry the goods at the reduced rates. 

It should be added that in the case of large shipments, such as the 
Standard Oil Co., advance notice of the quantity of cargo to be 
shipped during the next 30 or 45 days must be given, owing to the 
fact that the amount of their cargo is so large that no one line can 
satisfactorily carry the same unless such previous notice is given. 

Agreement Governing the Trade to the West Coast of Africa. 

Until about three years ago American merchants were without any 
regular line service to the West Coast of Africa, although a fre¬ 
quent, regular, and efficient service was operated to this market from 
both England and Germany. What little shipping existed between 
the United States and the West Coast of Africa was carried by 
tramps or sailing vessels, whose service, in the absence of regular 
sailings and fixed rates, was not such as to develop a new trade by 
enabling American merchants to compete with European producers. 
In 1911, however, three of the German lines, viz, the Woermann 
Line, the Hamburg-American Line (African service), and the Ham- 
burg-Bremen-African Line, combined for the purpose of running 
a steamer at regular intervals between New York and the principal 
ports on the West Coast of Africa. In its initial stages these lines 
knew that the service could only be operated at a loss, and Mr. 
W. G. Sickel, vice director in charge of the Hamburg-American 
Line, testified that the service is still an unprofitable one. The Ger¬ 
man lines also felt that it was undesirable to develop the trade by 
incurring large losses, and later, when the traffic had been placed on 
a paying basis, have the English lines obtain a share either with 
or without the consent of the originators of the trade. For these 
reasons the German lines invited the English lines to join the ven¬ 
ture. The result was the agreement of March 2, 1911 (a full copy 
of this agreement may be found in volume 2 of the committee’s 
proceedings, pp. 1383-1384), whereby the combined German and 
25655 °— VOL 4—14 - 7 



98 


AGREEMENTS IN THE AMERICAN-AFRICAN TRADE. 


English lines are now operating a joint service from New York 
to the West Coast of Africa, thereby offering facilities for the 
development of the trade vastly superior to those that could be 
furnished by the tramp and sailing vessel service of former days. 

The agreement was entered into between the three above-mentioned 
German lines, on the one part, and four English lines, viz, the Afri¬ 
can Steamship Co., the British & African Steam Navigation Co. 
(Ltd.), the Elder Line (Ltd.), and Elder, Dempster & Co. (Ltd.), 
on the other part, for the purpose of establishing a united service in 
both directions between the United States and the West Coast of 
Africa from Liideritzbucht to Dakar, the Canary Islands and 
Madeira, included. If either of the groups of lines should deem it 
necessary to start a new service from any other American port than 
New York to the West Coast of Africa, and vice versa, such group is 
bound to. invite the other group to join the undertaking on the basis 
of the existing contract, it being understood, however, that the in¬ 
vited party has the privilege of refusing. The agreement was made 
for a period of seven years, after which time the contract is to con¬ 
tinue unaltered, subject to six months’ notice on the part of each 
group of lines to terminate the agreement on January 1 of each 
year. Special attention should be called to the fact that this agree¬ 
ment was entered into from the inception of the trade; in fact, was 
responsible for initiating the service. Moreover, the combination 
comprises all the lines plying in the trade, and to all intents and pur¬ 
poses all the lines operate as a unit. Briefly classified, the terms of 
the agreement provide for the following ; 

(1) The same freight and passenger rates shall'be charged by 
both parties to the contract, such rates to be settled by mutual agree¬ 
ment and to be binding until changed. While either party may take 
cargo as through freight from the United States via Europe to the 
African ports contemplated under the agreement, it is provided 
that— 

all rates of freight from New York to the West Coast of Africa, either direct 
or via England or via Germany, shall be the ordinary tariff rates from England 
and Germany to the West Coast of Africa. 

From time to time the rates from New York to the Canary Islands, 
both on direct and through freight, must be settled by mutual agree¬ 
ment. 


AGREEMENTS IN THE AMERICAN-AERICAN TRADE. 99 

(2) With reference to the nature of the service, a number of details 
are fully specified in the agreement. Both parties to the contract 
shall maintain the service on a time-table mutually agreed upon, and 
sailings shall be so arranged that a British and German steamship 
shall take sailings alternately. The steamers employed shall, as 
regards size, be in proportion to the requirements of the trade, with 
a view to assuring to each group of lines, as far as possible, the car¬ 
riage of the same quantity of freight. All the lines shall issue 
circulars and time-tables jointly. The agents of the lines in America 
and Africa must issue similar notices, and each agent shall book only 
for his own line. 

(3) The freight and passenger business of the lines is pooled “ after 
the carrying steamer has first received 25 per cent thereof, the pool 
afterwards to be divided equally ” between the English and German 
lines. Either party to the contract may, however, load a full cargo 
of timber from the West Coast of Africa to the United States, if not 
in a regular line, without bringing the same into the pool, provided 
that the cargo is not to be delivered at New York, Boston, or Phila¬ 
delphia, and provided that a week’s notice of the intention to carry 
such cargo is given to the other party. All settlements between the 
parties to the pooling arrangement must be made every six months, 
all details to be arranged by mutual agreement. An adjustment of 
certain contracts with large shippers is also provided for. Thus the 
German lines agree to bring into the pool (1) the contract which 
they entered into with the Otavi Minen and Eisenbahn Gesellschaft 
for the transportation of ore from German southwest Africa to New 
York (Perth Amboy), and (2) the contract with the Vacuum Oil Co., 
as far as the same applies to the ports served. The German lines 
also— 

agree that the English lines try to alter their contract with the Vacuum Oil Co. 
so that they have also the right to take petroleum direct from the United States 
at the same rate as the German lines, and the English lines agree to do as 
aforesaid and to ship by this new line the petroleum above referred to for all 
ports worked by this service. Both parties to the contract are entitled and 
bound to tender to the other any petroleum under their contract with the 
Vacuum Oil Co. in so far as they are liable to provide tonnage for the same 
and have no sailings. 

It should be added here that the English lines also agree that at 
certain African ports their agency shall be the branch office of the 
Woermann Line. 






100 AGREEMENTS IN THE AMERICAN-AERICAN TRADE. 

(4) Conferences of the representatives of the lines summoned to 
discuss the service shall be held alternately in Hamburg and London. 

(5) Both parties to the contract must take joint steps to defend 
their mutual interests in the event of competition. 

(6) All disputes arising under the contract must be submitted to 
arbitration, each party naming its own commercial representative. 
If the English lines call for arbitration, the umpire shall be named 
by the Hamburg Chamber of Commerce, and in case arbitration is 
demanded by the German lines, the London Chamber of Commerce 
shall name the umpire. The decision of the majority is binding on 
both parties without recourse to law. 

According to the report of the Royal Commission on Shipping Rings 
(vol. 2, p. 3) the lines which are party to the American agreement 
appear also to be members of the West African Conference, covering 
the trade between the United Kingdom and Continental Europe and 
the West Coast of Africa. In this trade a 10 per cent deferred-rebate 
system on all shipments outward and on a specified number of articles 
homeward is used, disloyalty on outward shipments involving a for¬ 
feiture of rebates on homeward shipments, and vice versa. No men¬ 
tion of any deferred-rebate system is made in the American agree¬ 
ment, and Mr. W. G. Sickel, vice director in charge of the Hamburg- 
American Line, testified (vol. 2, p. 838) that upon investigation he 
found nothing in the handling of the business that would indicate 
the use of deferred rebates in the American trade. Mr. Sickel also 
testified (vol. 1, p. 554) that he believed that the Hamburg-American 
Line, trading to the west coast of Africa, has an agreement with the 
Hansa Line, operating to South and East Africa, whereby the 
Hamburg-American Line will not operate steamers from the United 
States to South and East Africa. 

Shipments to North African Ports. 

Shipments from the United States to the North Coast of Africa are 
very limited in volume, and only reach their destination by trans- 
shijiments at the ports of London, Liverpool, Havre, Hamburg, 
Naples, Genoa, Cadiz, and Barcelona. Return freight to the United 
States is also handled by transshipment at these ports. Nearly all of 
the 12 lines operating from New York and carrying cargo destined 
to North Africa have advised the committee that their freight ship- 


AGREEMENTS IN THE AMERICAN-AFRICAN TRADE. 101 

ments to this market are very few and that they have no fixed sched¬ 
ule of rates. Most of the freight, it seems, is carried by the Fabre Line 
via Marseilles to Oran, Algiers, Bona, and Tunis; by the Compagnia 
Generale Transatlantique to the same ports via Havre; and by the 
Compania Transatlantica to Fernando Po, Casa Blanca, Tangier, 
and Morocco via Cadiz. As regards the shipments via London and 
Liverpool, the business is practically confined to the Atlantic Trans¬ 
port Co. and the White Star Line. Both have advised the commit¬ 
tee that their shipments for North Africa are few and that they only 
accept shipments when the going rates by lines directly interested are 
high enough to allow them a fair New York-Liverpool proportion 
after p^iying the connecting lines. 

Mention should also be made of the fact that the lines operating 
in the traffic from New York to India and the Far East via the 
Suez call at either Port Said or Aden, as occasion requires. Five 
lines, viz, the American & Oriental Line, the American Asiatic 
Steamship Co., the Barber Line, the United States & China-Japan 
Steamship Line, and the American & Manchurian Line, operate a 
“ combination service ” from New York to Aden every 2 weeks or 
20 days, and thence by connecting steamers to ports in East Africa. 
While the steamers of these lines do not call at any ports in East 
Africa, they have advised the committee that they do issue through 
bills of lading to some of these ports for transshipment via Aden, 
the rates being arrived at by adding the amount charged by the 
on-carrying lines. The American & Indian Steamship Line calls 
at Port Said, Egypt, and makes similar connection for ports in 
East Africa. The first five lines not only advertise a combination 
service but are parties to the steamship conference governing the 
traffic from New York to the Far East via Suez. The several agree¬ 
ments for the regulation of this trade are discussed in the chapter 
on “Agreements in the American-Asiatic Trade.” 

According to Mr. Arthur Garrels, American consul at Alexandria, 
Egypt, there is no direct freight service from Egypt to American 
ports. (Vol. 3, p. 302.) Approximately 30,000 tons of cotton (this 
constituting by far the most important item of Egypt’s exports to 
the United States) is sent annually to Boston and New York, 
and practically all of this is transshipped at Liverpool. Through 


102 


AGREEMENTS IN THE AMERICAN-AFRICAN TRADE. 


rates via Liverpool, extending over an entire season, are quoted 
by some of the lines. “An arrangement also exists,” as reported by 
Mr. Garrels, “ between cotton exporters and several British steamship 
lines between Alexandria and Liverpool, whereby the former agree 
to confine their shipments to those lines, and the lines guarantee 
regular sailings with ample room and fixed rates for the entire year.” 



CHAPTER IV. 

AGREEMENTS IN THE AMERICAN-AUSTRALASIAN TRADE. 


Direct Shipments from New York to Australasian Ports. 

Direct shipments from the Atlantic seaboard of the United States 
to ports in Australia and New Zealand are confined to three lines, all 
operating from New York, viz: The American & Australian Steam¬ 
ship Line (owned and controlled by Messrs. Bucknall Bros, and sev¬ 
eral other English interests), The United Tyser Line (a combination 
of the Tyser Line with the Hansa and German Australian compa¬ 
nies), and the United States & Australasia Steamship Co. (an Amer¬ 
ican corporation). The last company is owned by a number of 
American merchants who ship extensively to Australia and who 
organized the company because they found it impossible to compete 
with the increasing number of foreign steamers. Having concluded 
that they could no longer successfully load steamers individually, 
they decided to cooperate and establish a line of their own. The line, 
it should be stated, owns no vessels but charters foreign boats for the 
operation of the service. 

In its report to the Committee the American & Australian Steam¬ 
ship Line explains that the aforementioned three lines have entered 
into an oral pooling agreement governing the operation of the service 
between New York and ports in Australia and New Zealand. The 
agreement, although not in writing, is strictly observed, and is in 
the nature of a partnership arrangement between the lines. There is 
no division of traffic nor a territorial division of routes. About 40 
sailings are made in the course of a year and the vessels of the several 
lines are loaded in turn as far as practicable. The total tonnage for 
the trade is furnished by the three lines in accordance with the fol¬ 
lowing agreed percentages, viz: The American & Australian Steam¬ 
ship Line, 42^ per cent. The United Tyser Line, 35 per cent, and the 
United States & Australasia Steamship Co., 22^ per cent. The profits 

103 



132 


AGREEMENTS IN THE AMERICAN-ASIATIC TRADE, 


On Pacific Coast Cargo—Continued. 

Silk Goods, Net. 

Rice. 

Peanuts. 

Cement, a rebate of 10 cents per cask. 

On Ocean Proportion of tbrougb rates to Overland Points: 

All cargo (except Raw Silk and Silk Goods) a rebate of 20 per cent ofE 
the Ocean proportion of the through rate. 

Raw Silk, Net. 

Silk Goods, Net. 

On the 1st July, 1911, to those exporters from Japan, who, from the 15th 
February, 1911, to the 80th June, 1911, may have found it to their interest to 
confine their support and shipments during that period to the Pacific Mail 
Steamship Co. we shall be glad to allow a return of fifty per cent of the above 
rebate on the freight paid as per Bill of Lading. 

On the 2nd of January, 1912, to those exporters who, on the 31st December, 
1911, may have found it to their interest to confine their support and shipments 
during the previous ten and a half months to the said Line, we will allow a 
further fifty per cent, of the above rebate, on freight contributed from the 
15th February, 1911, to the 80th June, 1911, and fifty per cent of the above 
rebate on freight contributed during the six months from the 1st July, 1911, to 
the 31st December, 1911. 

On the 1st July, 1912, to those exporters, who, on the 30th June, 1912, have 
found it to their interest to confine their support and shipments during the 
previous sixteen and a half months to the said Line, we will allow a further 
fifty per cent of the above rebate on freights contributed during the six months 
from the 1st July, 1911, to the 31st December, 1911, and fifty per cent on 
freights contributed during the six months from the 1st January, 1912, to the 
80th June, 1912. 

Until further notice future rebates will be payable Semi-Annually on the same 
terms and conditions as above set forth. 

Until further notice, shipments made by the Toyo Risen Kaisha, Portland & 
Asiatic S. S. Co., Canadian Pacific Railway Co.’s Royal Mail Steamship Line, 
Nippon, Yiisen Kaisha, Great Northern S. S. Co., Ocean S. S. Co., Ltd., China 
Mutual S. N. Co., Ltd., The Bank Line, Ltd., and Osaka Shosen Kaisha, will 
not invalidate claims for the above. 

No rebates will be payable to any exporter, shipper or consignee who has 
accepted concessions of any nature from any steamship Line other than the 
above agreed rebates. 

Exporters applying for the rebate which will be payable in Yokohama and 
Kobe on and after the 1st of July, 1911, 2nd January, 1912, and 1st July, 1912, 
respectively, must fill up and sign forms in accordance with the above terms 
and conditions. 

These forms can be obtained from the Agents of the Company. 

Yours truly, 

(Sgd) 

Yokohama, January 25th, 1911, 


B. C. Howaed, Agent, Yokohama. 


AGREEMENTS IN THE AMERICAN-ASIATIC TRADE. 133 

(For a sample copy of the form referred to, which exporters 
for the rebate must fill and sign in accordance with the 
terms and conditions of the agreement, see the form used by the 
Osaka Shosen Kaisha, reproduced in vol. 3, p. 198.) 

Tram-Pacific Tariff Bureau (Hongkong & China Branch ).—This 
Branch of the Bureau differs from the Japan Branch in two im* 
portant particulars. In the first place it issues only a joint tariff 
of eastbound proportional commodity rates,” the lines having filed 
with the Committee the last issue of the so-called “ Hongkong Tariff 
No. 4 ” (also dated Feb. 1, 1912) “ naming eastbound proportional 
commodity rates from Hongking, Keelung and ports of call in China 
and the Philippines to overland common points named in Trans-. 
Continental Freight Bureau’s Tariff S. R. 1010,” and applying by 
all of the nine lines which were named on the tariffs issued by the 
Japan Branch of the Bureau. (Vol. 3, p. 176.) Unlike the Japan 
Branch, the Hongkong & China Branch does not issue a port-to-port 
tariff. Mr. R. P. Schwerin testified (vol. 2, p. 889) that he did not 
believe that this Branch of the Bureau had “ very much to do with 
the port-to-port rates,” and that it has nothing whatever to do with 
our local Chinese business originating in Hongkong and destined to 
San Francisco, this traffic being entirely outside of their jurisdiction.” 
The rates considered in this conference seem to relate more particu¬ 
larly to such commodities as move in large volume and which are 
destined to interior points of the United States. This traffic, as 
pointed out by Mr. Schwerin, is in competition with the Suez lines, 
and it is in this connection that the trans-Pacific lines, as already 
explained, come together in conference for the purpose of watching 
the competitive situation with a view to diverting as much of that 
traffic to the associated water lines and transcontinental railroads as 
possible. 

Secondly, the Hongkong & China Branch of the Bureau has made 
no arrangements in its tariff for the granting of deferred rebates to 
loyal shippers. Mr. George E. Anderson, Consul General at Hong¬ 
kong, reports to the Committee (vol. 3, p. 170) that: “the Trans- 
Pacific Conference in Hongkong is held together as a matter of main¬ 
taining net rates without rebate,” and that at Hongkong shipments 
are made largely by Chinese firms, which can not be watched like 


106 AGREEMENTS IN THE AMERICAN-AUSTRALASIAN TRADE. 

standing between the White Star Line and the three direct lines 
operating from New York to the effect that the measurement cargo 
carried by the White Star Line from New York via Liverpool for 
Australia shall not exceed one-fourth of the aggregate measurement 
cargo taken by all four lines. According to this agreement, however, 
the White Star Line does not pool with the direct lines, and is free 
to quote its own rates. It is interesting to know in this connection 
that it was testified before the Koyal Commission on Shipping Rings 
(Vol. 1 of the report, pp. 64 and 65) that the through rates by the 
White Star Line from the United States to Australia via Liverpool 
were at one time 30 per cent lower than the rates on English goods 
sent by the same boats from Liverpool. This disparity in rates, the 
White Star Line contended, could not be obviated ‘‘ for the reason 
that unless they charged a rate lower than the direct boats from the 
United States, no merchant would be willing to send his goods via 
British ports with all the delay of the extra voyage and the risks of 
transshipment involved.” 

Trans-Pacific Lines to Australasia. 

Until recently three lines operated between the American Pacific 
coast and Australasian ports, viz: the Oceanic Steamship Co. and the 
Australian Mail Line from San Francisco, and the Canadian Pacific 
Railway Co.’s Canadian-Australian Royal Mail Steamship Line from 
Vancouver, British Columbia. Of these lines the Australian Mail Line 
ceased to exist on December 31,1911, and since that time, according to 
a communication, dated August 15, 1912, from Frank Waterhouse & 
Co., who were managing agents of the line, they have time-char¬ 
tered only three or four steamers for full cargoes from the Pacific 
coast to Australasia, consisting principally of lumber, but have no 
steamers under charter at the present time and are not now engaged 
in the trade. Whether these lines were operating under any agree¬ 
ment or understanding has not been determined. The Australian 
Mail Line furnished the Committee its Freight Tariff No. 6, effective 
July 1, 1911, with the explanation that the rates published therein 
were used at the time of the discontinuance of the line and have 
also been issued for the limited amount of merchandise carried in the 
time-chartered steamers. The Oceanic Steamship Co. furnished its 
Freight Tariff No. 1, effective June 1, 1912, from San Francisco and 


AGREEMENTS IN THE AMERICAN-AUSTRALASIAN TRADE. 107 

Honolulu to Sydney, Australia. A comparison of these two tariffs 
shows similar rates in nearly all instances. Where differences appear, 
the rates of the Oceanic Steamship Co. have been raised from 
$1 to $2 per ton, but it should be noted that the tariff of the 
Oceanic Steamship Co. is a later one, being dated June 1, 1912. The 
Committee was also furnished the tariff of westward rates in effect 
for overland business via Vancouver. The tariff shows that these 
overland rates are in effect over the Chicago, Milwaukee & St. Paul 
and the Canadian Pacific, and their connections only, and do not 
apply by the Southern Pacific, Santa Fe, Union Pacific, Great 
Northern or the Mallory Steamship Co., nor via San Francisco or 
Pacific gateways other than Seattle and Vancouver. 

Return Cargo to the United States. 

All of the direct lines operating from New York to Australia and 
New Zealand have reported to the Committee that their service is 
an outward one only, and that they do not carry return cargo 
directly to New York. Instead, the steamers generally return to 
London and Liverpool and cargo destined to the Atlantic seaboard 
of the United States is transshipped at the English ports. Thus in 
the case of New Zealand the greater portion of the exports to the 
United States is transshipped at London. The agents refuse to 
quote through rates except on one or two articles, merely quoting the 
rates to London and approximate the additional freight to New York 
as per the table published in the proceedings of the Committee (vol. 
3, p. 309). In the past a few shipments of wool were made directly 
from Australia to Boston and New York, but this direct movement 
was soon found to be impracticable in that London is the world’s 
great wool market, and shippers preferred to have their wool first 
sent to this port so as to have the advantages of a world market for 
distributive purposes. Moreover, wool is an expensive commodity 
and the item of freight, from the standpoint of savings through 
direct shipments, is a relatively unimportant factor. 

With reference to the American Pacific coast, the import trade 
from Australia and New Zealand is controlled by the Oceanic Steam¬ 
ship Co. and the Union Steamship Co., of New Zealand, the last 
line being the only one plying directly between New Zealand and the 
United States. The articles exported to the United States are of a 


108 AGEEEMENTS IN’ THE AMEKICAN-AUSTRALASIAN TRADE. 

limited variety and the current rates as reported to the Committee 
(vol. 3, p. 307), seem to be the same for the two lines. In fact, as re¬ 
ported by Mr. John P. Bray, Consul General at Sydney, “ It must be 
observed that the steamship lines engaged in the carriage of freight 
from Australia to the United States are practically all working on a 
system of agreement to prevent rate cutting. As far as can be ascer¬ 
tained, there are no rebates paid to shippers by the lines trading from 
Australia in order to coerce business and stifle legitimate competition. 
Such arrangements seem to be in the nature of informal measures for 
the protection of the general interests.” 


I 


CHAPTER V. 

AGREEMENTS IN THE AMERICAN-ASIATIC TRADE. 


The direct steamship lines engaged in the American-Asiatic trade, 
as regards both eastbound and westbound traffic, may be divided into 
five groups, viz, (1) the lines operating between the American 
Atlantic seaboard and the Far East, particularly via the Suez; (2) 
the lines connecting New York with the ports of India; (3) the lines 
operating between New York and the Dutch East Indies; (4) the 
trans-Pacific lines trading to and from the ports of the Far East; 
and (5) the Calcutta-Pacific trade via the Calcutta lines between Cal¬ 
cutta and Hongkong for transshipment by the trans-Pacific lines 
between Hongkong and the American Pacific coast. 

With few relatively unimportant exceptions, the steamship lines 
maintaining a regular service in each of the aforementioned five 
trade routes are parties to written agreements or informal under¬ 
standings, which have for their purpose the maintenance of rates and 
the prevention of ruinous competition. The Oriental trade, espe¬ 
cially by way of the Atlantic, is peculiar in that the voyage occupies 
such a long time as to make it almost impossible for one or two 
owners to supply a frequent, efficient and regular service. There is 
also an absence of passenger business on nearly all the lines. These 
peculiarities, together with the demoralizing opposition which the 
regular lines encounter from a considerable number of tramp vessels 
in the trade, are advanced as the chief reasons for the fact that 
pooling of earnings and deferred rebates are more generally preva¬ 
lent in this trade than in any of the other long-distance trades with 
which the United States is directly concerned. 

Agreements Governing the Eastbound and Westbound Trade Between the 
American Atlantic Seaboard and the Far East via Suez. 

Enumeration of steamship services and classification of agree¬ 
ments.—\N\i\i the possible exception of relatively unimportant lines 

with only occasional sailings, the following table furnishes a list of 

109 



110 


AGREEMENTS IN THE AMERICAN-ASIATIC TRADE. 


direct lines maintaining a regular service between the Atlantic ports 
of the United States and the Far East. Aside from the competition 
via European ports, these lines are to some extent in competition with 
the trans-Pacific lines. It is impossible to state the relative volume 
of American-Asiatic trade carried via the Pacific and via the Atlantic 
ports; but the relative importance of the two routes may be judged 
by the estimate furnished to the Committee with reference to the 
American-Japanese trade. (Ambassador C. P. Bryan’s report voL 3, 
p. 183.) According to this estimate “ about 70 per cent of the imports 
to the United States and 30 per cent of the exports therefrom are 
carried by trans-Pacific lines, and vice versa, about 70 per cent of 
exports from the United States and 30 per cent of imports thereto 
are shipped by Suez-Atlantic lines.” This difference is explained by 
the facts (1) that most of the Japanese products to the United States 
are of such a character (chiefly tea, silk, etc.) as to demand rapid 
shipment, and therefore move mostly by the more rapid trans-Pacific 
route despite the higher rates (consisting of the ocean rate plus the 
trans-Continental railway rate) ; and (2) that the products moving 
from the United States to Japan are mostly case oil, machinery, etc., 
i. e., of such a nature that they can be sent advantageously by the 
longer but cheaper Suez-Atlantic route. 

LINES OPERATING IN THE FAR EASTERN TRADE TO AND FROM 

NEW YORK. 


1 . 


2 . 


3 . 


Names of lines. 


Owners of vessels represented by the lines. 


The American & Oriental 
Line. 


The Barber and Dodwell 
Lines. 


The United States & 
China-J a p a n Steam¬ 
ship Co. 


An English line, under a trade name, operating steam¬ 
ers belonging to the Prince Line; Howard Houlder 
and Partners; Andrew Weir & Co.; Houlder, Middle- 
ton & Co. 

The Barber Line operates in the traffic eastward, and 
the Dodwell Line in the traffic westward. These 
lines operate steamers belonging to Barber & Co.; 
Lancashire Shipping Co.; Rankin, Gilmour & Co.; 
and Dodwell & Co. 

This is merely a trade name, representing the joint 
service of T. B. Roy den, representing the Indra 
Inver Line; and the Hamburg-American Line. 

These two interests own a controlling interest in the 
capital stock of this company. 






/f- ffieqel 


AGREEMENTS BETWEEN DIRECT DINES 

in the 

AMERICAN-ASIATIC TRADE 


UNITED STATE & CHINA-JAPAN S.S. CO. 

JfT.B. Royden (Indra Inver Line) 
I HamhurK-American Line 


AMERICAN-ASIATIC STEAMSHIP COMPANY 

(operated by Shewan, Tomes & Co.) 


AMERICAN & MANCHURIAN STEAMSHIP LINE 

(steamers owned 'B-gofcnall S.S. Lines. Ltd.) 


AMERICAN AND ORIENTAL LINE 


’Prince Line 


Howard Houlder and Partners 

If 

Andrew Weir & Co. 


Houlder. Middleton & Co. 


ANGLO-AMERICAN OIL COMPANY 

(operate ships of the Standard Oil Co. of N.Y.) 


BARBER LINE 



Barber & Co. 

k 

f’J 

Lancashire Shipping Co. 


Rankin, Gilmour & Co. 


Dodwell & Co. 


DODWELL LINE 



Barber & Co. 

k 

^ J 

lanoashire Shipping Co. 


Rankin, Gilmour & Co. 




BUCEHALL STEAMSHIP LINES, LTD. 


ANDREW WEIR and COMPANY 


HANSA LINE 


GERMAN AUSTRALIAN LINE 


PACIFIC MAIL STEAMSHIP COMPANY 


TOYO KISEN KAISHA 


NIPPON YUSEN KAISHA 


OSAKA SHOSEN KAISHA 


BANK LINE, LTD. 


CANADIAN PACIFIC RY. CO. S ROYAL MAIL S.S. LINES 




GREAT NORTHERN STEAMSHIP COMPANY 


BLUE FUNNEL LINE 

China Mutual Steam Navigation Company 
Ocean Steamship Company 



EASTWARD ATLANTIC-SUEZ 
AGREEMENT 

(American & Manchurian line 
is not a signatory to this 
agreement, hut cooperates 
-with thft nthft-r 


PppLING AGREEMENT 
(covering both eastward and 
westward voyages in the AtIan ■ 
tic-Suez trade with the Far 
East.) Although cooperating 
(With the other lines, Ameri¬ 
can & Manchurian Line is a 
party to this agreement as 
regards the westward voyage 


WESTWARD ATLANTIC-SUEZ 
AGREEMENT 


z 


AGREEMENTS WITH REFERENCE TO 

INDIA. (Joint eervioo under 
trade name of American & In¬ 
dian Line. Both voyages cov¬ 
ered. Welr,& Co. snare only 
in westward trade. 

. From Bombay to ^erica 
lines operate as Bombay- 
American Line.) 


TRANSPACIFIC PASSENGER 
AGREEMENT 

(Effected between the Pacific 
Mail S.S. Go. and the north- 
ern Pacific Coast lines.) 


S CUTTA-PACIFIC C 

ss.—Relates tv^. 
cweeiL Gal putt a and Eongfeon 
?y Calcutta lines, and^e- 
tween HongEong and America 
Pacific coast- b 


__can 

indicated 


NEW YORK CONFERENCE 

(Has Jurisdiction over the 
Eastward traffic.) 



LONDON CONFERENCE."(Composed 

"f lines operating under the 
hree^agreements. Supervises 
-he^othsr^conferences, and 
controls the schedule of 
sailings, and the pool ac¬ 
counts. 



HONGKONG CONFERENCE 

(Has Jurisdiction over the 
westbound traffic from all 
ports east of Singapore.) 


SHANGHAI CONFERENCE 
(Has Jurisdiction over the 
westbound traffic from Sing¬ 
apore and Penang.) 


AGREEMENT WITH REFERENCE TO 
JAVA 

(The indicated lines operate 
a Joint service to the Dutch 
East Indies.) 


tri 

tzl 

K3 

H 

O 

1 

CO 

ci 

M 

cs 

W 

o 

K3 

t?d 




WESTBOUND AGREEMENT WITH REF¬ 
ERENCE TO SAN FRANCISCO. (Pro¬ 
vides for- Joint schedule pf 
sailings as regards freight 
& .passenger puBiness origin-, 
ating on various R.R. lines.) 



TRANSPACIFIC TARIFF BUREAU 

(HONGKONG & CHINA BRANCH) Re¬ 
lates only to eastbpund traf¬ 
fic. Has Jurisdiction oyer 

trade from Hongkong and all 
ports of China.) 



TRANSPACIFIC TARIFF BUREAU 
(J^M BRANCH) This bureau ^ 
relates only to the eastbomid 
traffic, ana has Jurisdiction 
over trade from all Japanese 
ports.) 



TRANSPACIFIC TARIFF BUREAU_^ 
(WESTBOUmT Relates only tp 
westbound^trafxlo from northr 
em Pacific ports.,to Far East 
Does not include lines from 

San Francisco. No connection 
p^ween this Bureau and.,,Hong:- 
kong & China and Japan Branch- 



K3 

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SzJ 

CO 

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M 

M 

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Cj 

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AGREEMENTS IN THE AMEEICAN-ASIATIC TRADE. 


Ill 


LINES OPERATING IN THE FAR EASTERN TRADE TO AND FROM 

NEW YORK—Continued. 


Names of lines. 


4. The American-Asiatic 

Steamship Co. 

5. The Anglo-American Oil 

Co. 

6. The American and 

Manchurian Steamship 
Line. 


7. The Isthmian Steamship 
Line. 


Owners of vessels represented by the lines. 


Operated by Shewan, Tomes & Co. 

Operating ships of the Standard OR Co. of New York. 

Is merely a trade name. Operates the steamers owned 
or chartered by the Bucknall Steamship Lines, Ltd. 
YTiile the owners of the vessels are not parties to the 
agreements, the line cooperates with the lines parties 
to the agreements. The line is only a member of 
the westward pool. (Vol. 1, pp. 462^63.) 

It is a trade name only, and all its steamers are char¬ 
tered for single trips for full cargoes, and the total 
cargo shipped is that of the United States Steel 
Products Co., a subsidiary of the United States Steel 
Corporation. This line does not participate in any 
of the agreements. (Vol. 1, p. 497.) 


With the exception of the Isthmian Steamship Line (a private 
carrier operating for the United States Steel Corporation) the fore¬ 
going lines are parties to, or work in conformity with, the several 
agreements governing the trade, both eastbound and westbound, 
between the Atlantic ports of the United States and East Asiatic 
ports, via Suez. Three agreements relating to this traffic, together 
with a compilation of pooling rules, are published in the Govern¬ 
ment’s petition in the suit of the United States v. the American 
Asiatic Steamship Co., et al.,^ and the Committee is advised that 
with certain modifications, which have become necessary since their 


1 The agreements published as Exhibits 1, 2, 3 and 4 in the Government’s petition are 
the following: 

(1) “Memorandum of agreement (called the Eastward Agreement) regarding the 
Atlantic ports of the U. S. A. and Eastern Asiatic ports.** —This agreement is signed on 
behalf of Barber & Co., American-Asiatic Steamship Co., United States & China-Japan 
Steamship Co., American & Oriental Line, and the Anglo-American Oil Co., and is found 
on pages 27-30 of the petition. While the American & Manchurian Steamship Line is 
not a party to the agreement, the line nevertheless cooperates with the above mentioned 
lines. 

(2) “Memorandum of agreement (called the Westward Agreement) regarding the trade 
between Japan, China, Manila, Straits, and Malabar coast and the U. 8. A. via Suez .**— 
This agreement is signed on behalf of the United States & China-Japan Steamship Co., 
American-Asiatic Steamship Co., The Dodwell Line, Anglo-American Oil Co. and Ameri¬ 
can & Oriental Line, and is found on pages 31-37 of the petition. While the American 









112 


AGREEMENTS IN THE AMERICAN-ASIATIC TRADE. 


publication, these agreements and rules are substantially in effect 
at present. Mr. Paul Gottheil, whose firm furnished the agreements 
to the Government, expressed his belief that these agreements are 
still in effect. (Vol. 1, p. 326.) Messrs. Herbert Barber and William 
B.oyd, representing respectively the Barber and American & Oriental 
Lines, testified that “ Exhibits 1, 2, 3 and 4, referred to in the suit, 
practically cover, with slight alterations, the agreements under which 
we are working.” (Yol. 1, pp. 427^28.) The managers of the 
United States & China-Japan Steamship Co. and the Prince Line also 
state in their replies to the Committee’s Schedule of Inquiries that 
“All agreements in regard to this trade have been submitted to the 
court in the case against the American Asiatic Steamship Co., et al.” 

& Manchurian Steamship Line is not a party to the agreement, the line nevertheless 
cooperates with the above mentioned lines. 

In its answers to the Committee’s Schedule of Inquiries the American & Manchurian 
Line states that in the eastward voyage to the Far East It is operating as an. inde¬ 
pendent line, and that it is not a signatory to the agreement. The purpose of the agree¬ 
ment, it is stated, is to furnish all the tonnage required for the trade of the associated 
lines, and the Bucknall Steamship Lines, Ltd., furnish the tonnage required for the trade 
of the American & Manchurian Line, the tonnage being furnished in the following pro¬ 
portions at present: The American & Manchurian Line, eleven thirty-sixths; and the 
United States & China-Japan Line, American & Oriental Line, American-Asiatic Steam¬ 
ship Co., and the Barber Line, twenty-five thirty-sixths. It is also explained that east¬ 
ward the line does not pool its freight with the other lines, but retains its own earnings. 
In the westward service, however, the line acknowledged that it operates under an agree¬ 
ment with the other lines. 

(3) “Pooling agreement between the owners (including chartered owners) and the 
steamers now being run or to be run in the trade between the Atlantic ports of the 
United States and the Far East^ as set forth in the agreement dated April IS, 1905 /*— 
The date refers to the eastward and westward agreements. This pooling agreement covers 
both eastward and westward voyages and is signed on behalf of the Dodwell Line, the 
United States & China-Japan Steamship Co., the Barber Line, Lancashire Shipping Co., 
Rankin, Gilmour & Co., American-Asiatic Steamship Co., American & Oriental Line and 
Anglo-American Oil Co., and is published on pages 38-47 of the petition. The Ameri¬ 
can & Manchurian Steamship Line, the Committee is advised, is only a member of the 
westward pool. 

(4) “ Pooling rules for the pooling of steamers* freights adopted as between the owners 
(including chartered owners) of the steamers now being run or to be run in the tradd 
between the Atlantic ports of the United States and the Far East, as set forth in the 
agreements dated April IS, 1905.** —These rules are published on pages 48-85 of the 
petition. 

Several of the lines, engaged in the trade, but which do not appear as signers of the 
above mentioned agreements, have advised the Committee that their boats operate in 
conjunction with the joint services of the other lines. J. Chambers & Co. and the Prince 
Line have reported to this effect in their replies to the Committee’s Schedule of In¬ 
quiries. The Prince Line states that it operates its steamers in conjunction with the 
group of owners operating under the name of American & Oriental Line ; and J. Cham¬ 
bers & Co. state that: “ Though not ourselves actually a party to the agreement some of 
our steamers load outwardly from New York to the Far East and back to the United 
States Atlantic ports in the Barber and Dodwell lines respectively, and we conform with 
the agreements entered into by these lines with those engaged in the same trade.” 



AGREEMENTS IN THE AMERICAN-ASIATIC TRADE. 


113 


The essential features of the aforementioned Eastbound and West¬ 
bound Agreements may be summarized under the following heads: 

Regulation of the numher and order of the sailings of the several 
lines .—On the basis of 41 sailings in the eastbound trade, the United 
States and China-Japan, Barber, American & Oriental, and Amer¬ 
ican-Asiatic Lines are respectively allotted 13, 13, 8, and 7 sailings. 
These allotted sailings are to be distributed as nearly as possible at 
regular intervals throughout the year, and the order of taking the 
berth is to be mutually arranged by the agents in New York. Addi¬ 
tional sailings can be admitted only by the consent of two-thirds of 
the signatories, based on their respective number of sailings. “ The 
whole purpose of this agreement,” according to section 10 of the East¬ 
ward Agreement, “ is an equal and fair division of the traffic between 
the services, to work openly and fairly with one another and to avoid 
any and all steps by which even the appearance of undue advantage 
is given.” 

Westbound sailings, on the basis of 46 loadings per annum, shall 
be divided as follows: Dodwell Line, 15J; United States & China- 
Japan Line, 10^; American-Asiatic Line, 7; Anglo-American Oil- 
Company, 8; and American & Oriental Line, 5. The Anglo-Ameri¬ 
can Oil Co., however, agrees to confine its loadings as far as possible 
to its own steamers. The admission of additional sailings, the dis¬ 
tribution of these sailings throughout the year, and the arrangement 
and order of taking berth^ are determined in the same manner as 
described for eastward voyage. 

Should the 46 specified sailings prove too many or too few for 
the trade, the several lines have agreed upon the order in which 
each is to reduce its loadings. In case one party should be short 
of tonnage, and another of the signatories have a surplus of ves¬ 
sels at the time, “ the wants of the former may be supplied by 
the latter, but agents of the former shall load the steamers and re¬ 
ceive the usual commission for so doing.” Moreover, if none of the 
signatories has sufficient available tonnage to meet the requirements 
of the trade at any time, Messrs. T. B. Roy den of Liverpool, Wm. 
Adamson & Co. of London, and Dodwell & Co., Ltd., of London, are 
authorized to act in the matter because “ it is advisable that the wants 
of the trade be supplied by preference from steamers belonging to 
the ‘lines’ trading regularly with the Far East.” 

25655" —VOL 4—14-8 



114 


AGREEMENTS IN THE AMERICAN-ASIATIC TRADE. 


Regulation of the hooking of freight and the movement of 
steamers .—One of the objects of the agreements is declared to be 
“ the prevention of the steamers of the signatories from clashing 
while loading.” To accomplish this purpose numerous provisions 
were adopted for regulating the booking of freight. Thus, in the 
eastward trade, all engagements of freight must be reported to one 
another by the agents in conference on the first business day of each 
week and copies of all freight lists must be exchanged not less than 
three weeks after the departure of each steamer. It is the declared 
purpose of the Eastward Agreement to “ equitably divide all book¬ 
ings ” and to this end all contracts must be taken for joint account. 

* 

Where contracts can not be divided, and a shortage to any of the 
parties to the agreement results in consequence thereof, such shortage 
must be made good to that party out of other contracts previously 
or subsequently secured. Each line, however, is given the right to 
book cargo specifically for the next steamer to be dispatched, pro¬ 
vided the same is ready to load within 30 days; but no line has 
the right to book specifically for any steamer until allowed to do so 
by a two-thirds majority vote (based on the respective number of 
' allotted sailings) of the New York agents. 

Engagements of bulk freight, viz, petroleum in cases, phosphate 
rock and coal, are not necessarily joint operations, but it is declared 
that the lines shall avoid competition in this type of freight by 
“ the closest cooperation,” and bookings of such freight shall be 
reported as soon as arranged. Similarly, in the case of government 
contracts for the carriage of freight, the lines have agreed not to 
compete by considering all such freight as being “ taken for j oint 
account and pooled on a basis to be agreed between the representative 
agents in such a way that all may obtain their proper proportion of 
the benefits arising from such contracts.” It is also agreed that in 
the eastward trade no steamer with a capacity exceeding 8,000 tons 
shall be allowed to operate except by the unanimous consent of the 
agents. 

In the westward trade the movements of boats at the loading ports 
east of Hongkong are regulated by the Hongkong agents with a view 
to keeping the berth as fully and regularly supplied with tonnage 
as possible. All boats (sec. 13) shall load at Yokohama, Kobe, 
Shanghai, Foochow, Amoy, Hongkong, Manila, Singapore and the 
Malabar coast if specified amounts of freight are awaiting shipment. 


AGREEMENTS IN THE AMERICAN-ASIATIO TRADE. 


115 


but no steamer can be compelled to load at more than a total of six 
of these ports unless the steamer finds difficulty in obtaining the 
required cargo without delay to herself and the steamers following 
her. Each boat (sec. 14) must reserve a minimum of one-eighth of 
her capacity for Singapore and/or Penang until the Singapore agent 
shall have advised the Hongkong agents that less space is required. 
Lastly, section 19 of the Westward Agreement stipulates that 
“ except with the consent of all the parties in Hongkong, no steamer 
shall carry more than a total of 6,000 tons, weight or measurement, 
from Japan, China and Hongkong. 

Regulation of commissions and the transmission of communica¬ 
tions. —Rebates of every description to agents, shippers or con¬ 
tractors, such as private rebates, illegitimate brokerages, or refunds 
of commissions, are prohibited in both the Eastward and Westward 
Agreements. Freight brokerages are definitely limited to certain 
percentages unless all agents mutually agree to the contrary. Ac¬ 
cording to the Westward Agreement, it appears that agents at the 
various eastern ports act under instructions from the Hongkong 
agents; and that the agents at these ports are instructed to “ work 
together with the representatives of each of the parties to this agree¬ 
ment in carrying it out, for which purpose a copy is to be sent them 
for their private information.” For the purpose of avoiding unnec¬ 
essary expense and delay, the Eastward Agreement provides that the 
signatories shall nominate one of the firms of agents in New York 
to act for the time being as the mouthpiece of the Associated Agents; 
and likewise one of their own number to act in a similar capacity in 
England. All cabled inquiries and replies thereto, pertaining to mat¬ 
ters of policy, important contracts, etc., shall be communicated to the 
several parties through this channel. It is understood, however, that 
this arrangement in no way interferes with the right of the various 
signatories to the agreement to communicate with their own agents 
as they may see fit. 

The control of rates. —Rates of freight from America to the Far 
East are controlled by the agents in New York, who “ before naming 
or altering a rate for any commodity shall first confer and agree 
amongst themselves as to the rates to be named and/or the reduction 

o 

to be made.” (Article 2 of the Eastward Agreement.) The several 
lines have a tariff to all points in the Far East, which expressly 


116 AGKEEMENTS IN THE AMEKICAN-ASIATIC TRADE. 

) 

declares that it is the intention that all classes of merchandise pay 
the rates specified. (For a copy of tariff see vol. 1, p. 331.) All 
changes in this tariff must be by unanimous agreement of the agents 
meeting in the New York Conference (vol. 1, p. 331), it being recog¬ 
nized by the owners of the lines in England that the New York agents 
are more likely to be in touch with the views of merchants and ship¬ 
pers than the owners abroad. (Report of the U. S. & C. J. S. S. Co. 
to the Committee.) 

All the lines in the Conference have agreed to quote the same rates 
to all shippers. None of the contracts with shippers, most of which 
are joint contracts, it was testified (vol. 1, p. 390) give special rates 
or rebates to some shippers which are denied to others. Although 
the contract rates are generally less than those specified in the regular 
tariff, the lines pursue a policy of giving the small shipper the same 
contract rates as the large shippers, and are willing at all times to 
contract with all shippers on the same terms. (Vol. 1, pp. 390 and 
391.) 

Westbound rates are arranged by the owners in consultation with 
their agents at eastern ports, who are in almost all cases themselves 
the principal merchants at the various ports of call. From all ports 
east of Singapore, rates to the Atlantic Coast of the United States 
“ shall be controlled and determined by the agents in Hongkong, 
who shall all work together for this purpose; agents at all other ports 
to be expressly prohibited from making a rate on any commodity or 
reducing any existing rate without the sanction of the Hongkong 

I 

agents in each case.” (Article 1 of Westward Agreement.) All 
reductions from the established rates must be unanimously agTeed to 
by the representatives of the signatories stationed in Hongkong, 
except in the event of a nonconference steamer quoting a lower rate 
at any of the ports, when the joint agents at that port may allow the 
competing conference steamer to accept whatever rate the noncon¬ 
ference steamer may quote, subject however, if possible, to prior con¬ 
sultation with the Hongkong Conference. (Articles 2 and 3.) Simi¬ 
larly, the rates from Singapore and Penang shall be fixed and altered 
in conference by the agents of the signatories stationed at Singapore 
in the same manner as described in connection with the Honffkonsr 
Conference. Section 18 of the agreement stipulates that in fixing 
rates the agents in Hongkong and Singapore shall do so on the basis 
of a reasonable profit to the owners, without making them so high as 


AGREEMENTS IN THE AMERICAN-ASIATIC TRADE. 117 

to attract competition or impede traffic. It should be added that the 
conference lines do not publish a joint tariif from Japan, China, 
Hongkong and Singapore. Instead, each line issues its own indi¬ 
vidual tariff, these tariffs, however, agreeing in all particulars. 

Methods of meeting and restricting com'petition — DefcT^ed re¬ 
lates ,—No agreements have been called to the attention of the Com¬ 
mittee which so frankly disclose their purpose as the several agree¬ 
ments now under consideration. The Eastward Agreement states 
that “ the fundamental condition of this agreement is to be close 
cooperation, and in order to secure this result the rates of freight 
from America to the East shall be controlled and mutually deter¬ 
mined by the agents in New York and that ‘‘ Competition between 
the lines is to be avoided and the closest possible cooperation is to be 
aimed at.” The Westward Agreement stipulates in its preamble that 

it is desirable to prevent competition for the same cargo among 
the representatives in the Far East and the signatories hereto and 
that (sec. 23) “ in order to preserve harmonious relations with one 
another and to avoid friction, the signatories bind themselves and 
their representative supporters during the currency of this agree¬ 
ment to abstain from attacking, or competing for, any trade in which 
any other of the signatories may at present be engaged.” Similarly, 
the pooling agreement states in its preamble that “ in order to con¬ 
solidate the position of the associated lines and to provide a method 
of meeting outside opposition that may be effective and at the same 
time fair and equitable to all concerned, it is hereby agreed that the 
net freights earned by all the steamers loaded from the Atlantic ports 
of the United States to the Far East, and vice versa, in accordance 
with the terms of the Eastward and Westward Agreements, shall 
be pooled.” This avowed purpose of pooling would tend to show that, 
while obvious benefits are undoubtedly derived from the existence of 
a joint service of many lines, the combined power of the united lines 
might lend itself to the elimination of an outside competitor from 
the trade. By distributing the losses of a rate war over all the parties 

of the pool, each constituent member thereof would suffer propor- 

♦ 

tionately much less than the outside competitor who is trying to fight 
his way into the trade single handed. 

• In addition to pooling, however, a deferred rebate system exists in 
the westbound trade (no deferred rebates exist in the trade east- 
bound) from all the ports of the Far East to the United States, 


/ 


118 AGKEEMENTS IN THE AMERICAN-ASIATIC TRADE. 

the Suez. Each of the conference lines uses its own individual tariff, 
and provision is made in each for a deferred rebate allowance of 10 
per cent on all rates with the exception of those marked “ net.” An 
examination of the tariff shows, however, that net rates apply to only 
three articles, namely, private effects, shells and bean cake. Accord¬ 
ing to the deferred rebate notice issued by the American-Asiatic 
Steamship Co., under date of May 1, 1912 (vol. 3, p. 173), claims for 
rebates until further notice will not be invalidated because of ship¬ 
ments made by the steamers of the Hamburg-American and Indra 
Lines (United States & China-Japan Steamship Co.), Dodwell & 
Co., Anglo-American Oil Co., American & Manchurian Line, and the' 
American & Oriental Line. 

It is interesting to note the reasons which induced the lines to estab¬ 
lish a deferred rebate system in the westward trade. In answer to the 
Committee’s inquiry as to the existence of “ any agreement for the 
purpose of granting deferred rebates or other privileges or advan¬ 
tages,” the Management of the United States & China-Japan Steam¬ 
ship Co. explains that: “ We find it difficult to answer this question, 
as from the wording it appears to be assumed that deferred rebates 
in some way confer special advantages on certain privileged firms. 
The system of deferred rebates in our opinion can not be considered 
as a privilege in the sense of your question, as all merchants receive the 
same return in proportion to their support, and moreover, they are 
all aware that all other merchants in the trade receive a similar re¬ 
turn. The system of deferred rebates was instituted in order to 
insure uniformity and stability of rates and an efficient service, which 
are admittedly of great advantage to all merchants, and can only be 
obtained by the exclusion of the casual outside owner who is not per¬ 
manently interested in the trade.” Judging from the wording of the 
Westward Agreement itself, it is apparent that the signatories re¬ 
garded a deferred rebate system, deferring payment until usually six 
months following the period to which the rebate applies, as a means 
of effectively tying the merchants (by placing them in a position of 
continual dependence) to the conference lines. Special reference is 
had to Articles 20 and 21 of the agreement, which provide that “ in 
order to preserve the trade as far as possible for those recently and 
now supplying it with tonnage, it is considered necessary that ship¬ 
pers should be bound to them by a system of deferred rebates, made 
payable to the shippers in the Far East so as to avoid raising the 


AGREEMENTS IN THE AMERICAN-ASIATIC TRADE. ^ 119 

question of the legality in the United States of such an arrangement, 
and it is intended to take steps at once to formulate a plan for carry¬ 
ing out this idea. It is evident that this arrangement can not be com¬ 
pleted without extending the system of cooperation and of rebates to 
the Straits Settlements and the Malabar coast, and the intention is 
to give effect to this point.” 

The settlement of disputes and assessment of penalties. —Should 
disputes arise under the agreements, they must be left to the decision 
of the signatories, the voting power of each party being pro rata to 
its share in the business. In case of objection to the decision by any 
party, the matter must be referred to the decision of two Arbitrators, 
who must be commercial men in London, New York, or Hongkong, 
whichever place the majority of the signatories may decide is best 
suited for the purpose. Each side to the dispute appoints one arbi¬ 
trator, the two arbitrators being empowered to appoint an umpire, 
whose decision shall be final as between all the parties to the agree¬ 
ment. 

According to the Westward Agreement, any breach of its condi¬ 
tions by one or more of the signatories shall render each offender 
liable to a penalty of £1,000, or a forfeiture of all profit made by the 
breach, whichever amounts to the most money. This penalty or for¬ 
feiture is divided among the other signatories pro rata, according to 
their interests in the business. Where, however, the breach was not 
willful or was without knowledge on the part of the offender, only 
the gross profit resulting from the breach is declared to be forfeited 
and divided. 

Pooling Agreement between the oumers of steamers operating 
under the terms of the Eastward and Westioard Agreements. —The 
owners of the steamers agreed to prepare a statement, as soon as 
possible after the termination of each steamer’s voyage, either east¬ 
ward or westward, showing all the necessary pooling particulars as 
per a prescribed form. These statements, together with all support¬ 
ing vouchers, copies of manifests, certificates of cargo space and dead 
weight capacity, and time statements as to arrivals and departures, 
are forwarded to Mr. T. B. Koyden of Liverpool, Secretary of the 
Conference, who prepares at the end of each year two general pooling 
accounts, one for all the eastward voyages and the other for all the 
westward voyages during the year. 


120 AGREEMENTS IN THE AMERICAN-ASIATIC TRADE. 

The manner of computing the results of each of these pools is ex¬ 
plained at great length in the agreement, and many of the details it 
is unnecessary to refer to. Suffice it to say that in each instance the 
owners of the steamers are debited with all net freight received in 
the voyages, and the respective pooling accounts are credited with the 
same. “ Net freight,” as above referred to, is ascertained by deduct¬ 
ing from the gross freight received, (1) all the steamers’ port 
charges and numerous other enumerated charges, dues and fees; (2) 
all loading and discharging expenses; and (3) all loading commis¬ 
sions, brokerages, rebates, transshipments, storages, etc. The pool¬ 
ing accounts are then to be debited, and the owners of the several 
steamers credited, with the “ initial hire ” and “ coaling allowance,” 
the manner of ascertaining these two items being set forth in the 
agreement at great length for each of the pools separately (pp. 
40-42 of the Government’s petition). The agreement then goes on to 
provide (sec. 4) that: 

The balances of the said Pooling Accounts, after crediting them and debiting 
them with the amounts as aforesaid, shall be ascertained, and the rate per 
cent which such balances bear to the total of the Initial Hire credited to the 
Owners of aU the steamers included in the Respective Pools shall be calculated. 
The Owners of each steamer are to be then credited with an amount the 
equivalent of the rate per cent so ascertained upon the amount of the initial 
hire of each of such owners’ steamers included in each Pool—as for instance, 
should the balance remaining be equal to 10 per cent on the total Initial Hire 
paid for all the steamers in either Pool, the Owners of each steamer will be 
credited with an additional 10 per cent upon the Initial Hire money of their 
steamer. Those Owners who are then found to be indebted to the Pool shall 
forthwith pay the amount of such indebtedness to the Pool Managers, and the 
Managers upon receipt of same shall pay to the Owners who have a balance 
in their favor the amount of such balances. 

The aforementioned pooling agreement is administered in Eng¬ 
land because the owners are located there! By this arrangement they 
are enabled to divide the results of the business in accordance with 
the division agreed upon, i. e., the arrangement practically means 
that the several owners manage or control all the steamers in the 
trade as one company through pool managers, who represent all 
the interests, receive all the reports of the several owners, compute 
the accounts, and eventually collect from, or pay to, the several 
owners the sums which they may be found to owe to, or be entitled 
to receive from, the pool. (Vol. 1 p. 328.) From time to time since 


AGKEEMENTS IN THE AMERICAN-ASIATIC TRADE. 


121 


this pooling agreement was completed in Ijondon on April 13, 1905, 
its terms have been slightly modified, but such modifications, the 
Committee is advised, relate only to details and not to any alter* 
ations of the general plan outlined in the original contract. 

Steamship Conferences; Eastbonnd and Westbound, in the Trade Between 
the Atlantic Seaboard and the Far East, via the Suez. 

For the purpose of administering the provisions of the Eastward, 
Westward and Pooling Agreements, the signatories thereto main* 
tain at least four Conferences, viz: The New York Conference, the 
Hongkong and Singapore Conferences, and the London Conference. 
Each of these conferences, as has already been indicated in the de¬ 
scription of the agreements, has its own functions to perform. Thus, 
the agents of the lines meeting in the New York IJonference have 
complete control over the making of eastbound rates and tariffs. 
They meet regularly every Tuesday at the different offices of the 
agents, the place of meeting changing every three months. At these 
meetings the agents discuss the position of the vessels; the amount of 
cargo already booked or still required; the necessity of delaying 
sailings or of asking for additional tonnage, for the efficient and 
satisfactory operation of the service; the question of changing rates 
in the fixed tariff for various reasons, such as meeting competition 
via Europe, or via the overland and trans-Pacific route; and the 
means necessary to facilitate the sale of large quantities of freight 
which can not be sold under existing tariff rates, and which will 
move in competition with Europe if existing rates are sufficiently 
reduced. The agents in this conference also bring together all the 
contracts which the lines have made with shippers, with a view to 
adjusting the available tonnage to the amount of freight offered, in 
the most prompt and economical manner. 

The representatives of the signatories, meeting regularly in the 
Hongkong and Singapore Conferences, perform the same functions 
for the westward voyage that the New York Conference exercises in 
the eastward voyage. Although the Committee has been advised that 
the agents of the associated lines meet in various conferences at other 
leading ports, the Hongkong Conference has been given complete 
control, by the Westward Agreement, over westbound rates from all 
points east of Singapore; and the agents of all other ports are 


122 


AGREEMENTS IN THE AMERICAN-ASIATIC TRADE. 


expressly prohibited from making or altering any rate without the 
sanction of the Hongkong Conference. Similar rate making powers 
have been delegated to the agents meeting in the Singapore Con¬ 
ference as regards westbound trade from Singapore and Penang. 
The loading and movement of vessels from the two groups of ports 
just mentioned are likewise under the control respectively of these 
two conferences. 

The London Conference, as distinguished from the other con¬ 
ferences attended by agents, is composed of the owners of the several 
steamship interests operating under the three agreements, and from 
the standpoint of general control exercises a supervisory power over 
the functions of the other conferences. While the rate making func¬ 
tion has been delegated to the agents because they are most familiar 
with the immediate requirements of the trade, the London Conference 
controls the schedule of sailings to be adhered to by each of the lines, 
i. e., the dates upon which each line is permitted to start a sailing 
either eastward or westward. This conference of owners also has 
complete control over the pooling arrangement already described, 
and all necessary pooling data must be sent to its pool managers in 
Liverpool. 

Agreements in the Trade with India. 

Understanding Between the Direct Lines Operating To and From 
New York, 

Only two direct lines operate in the trade between the Eastern coast 
of the United States and India, namely, the Hansa Line, of Bremen, 
and the Bucknall Steamship Lines, Ltd., of London (vol. 1, pp. 
333-334). These two interests operate a joint service, both eastbound 
and westbound, under the trade name of the American & Indian Line. 
The American & Indian Line’s report to the Committee, under date of 
April 12,1913, explains that the joint service has been operated under 
the conditions of an agreement between the two interests made in 
1901, but which lapsed in 1908, since which time the cooperation of 
the lines has been based on a friendly but informal understanding. 

According to this understanding the tonnage in the westward 
service must be provided in equal proportions by the two companies. 
The earnings of the steamers westward are pooled, and are equally 
divided, after allowance has been made for certain out payments. 
In 1909 this arrangement was modified by an agreement with Messrs. 


AGREEMENTS IN THE AMERICAN-ASIATIC TRADE. 


123 


Andrew Weir & Co., whereby this interest could share in the trade 
westward to the extent of six sailing per annum. 

In the outward service the Bucknall Steamship Lines (Ltd.) and 
the Hansa Line, which conduct the entire service, furnish the tonnage 
in the respective proportions of 25 per cent and 75 per cent. The 
object of the lines is to provide all the tonnage necessary for the 
trade, and there is no regulation or limitation regarding the time or 
number of sailings. Tonnage for the homeward service is furnished 
by the two lines in the respective proportions of 50 per cent each, after 
providing for six sailings per annum by Andrew Weir & Co. Freight 
rates on the outward service are fixed and changed by the agents in 
New York, and as far as possible, are claimed to be uniform for all 
shippers. In the homeward voyage, rates are fixed and changed by 
the Indian agents in consultation with the London principals, are 
uniform for all shippers, and are subject to a deferred rebate allow¬ 
ance of 10 per cent. No deferred rebate system, however, exists in 
the outward trade. 

Mr. Paul Gottheil testified (vol. 1, p. 337) that the r-ates of the 
two lines must be constantly modified because of the large indirect 
competition via Europe. In fact, when the service was first estab¬ 
lished practically all the traffic between the United States and India 
was dependent on indirect shipments, and the rates were almost 
prohibitive because joint rates had to be made by adding to the 
European rate the trans-Atlantic rate from port of shipment to 
port of transshipment. To start the direct trade it was necessary to 
secure for each steamer, or at regular intervals, a specified amount 
of contract freight. Such contract freight was furnished by the 
Standard Oil Co. in the form of large quantities of case oil. As 
Mr. Gottheil testified, the greater part of the cargo at the beginning 
consisted of Standard Oil products, which the steamship line was 
allowed to take either as a maximum or minimum cargo, and in 
this w-ay the service was enabled to build up a direct trade, especially 
because the lines had adopted the policy of charging American ex¬ 
porters the rates current from Europe, thus placing them on a parity 
with English and German exporters who up to that time had 
controlled the trade. (Yol. 1, p. 337.) 

The Standard Oil Co., Mr. Gottheil testified, is still the line’s 
greatest customer to the East Indies, and their discontinuance as a 


124 


AGREEMENTS IN THE AMEEICAN-ASIATIC TRADE. 


shipper of case oil would compel the lines to abandon the service. 
To meet the requirements of the Standard Oil Co. for the delivery of 
its oil products the lines must extend the service to numerous ports 
of India/ and the large volume of this company’s freight enables 
the lines to carry all other exports from the United States to India 
on the basis of the rates charged from Europe to the,same markets. 
(Vol. 1, p. 338.) The witness further stated that there is no working 
agreement or conference relation between this direct service and the 
representatives of the lines engaged in the indirect trade via Europe. 
Instead, the rates can not always be maintained even on a parity 
because— 

The position of the direct service, by reason of the many ports of call that 
have to be made, is a difficult one. The principal ports of India, where most 
of the cargo is shipped to, are of course Bombay and Calcutta. And as you 
will see from the number of ports that we go to before we reach either one of 
these important places, we are a long time on the route, and we can not always 
make the delivery that is desired, and certain classes of goods we can not get 
at all, and in other classes of goods in order to get the same we must make 
Concessions. * ♦ * jf you can afford to pay a very high rate of freight 

which will enable you to send the cargo by the very fast ship across the Atlan¬ 
tic and again by the very fast ship from Europe to India, if you can afford 
^ to pay that freight, it certainly beats us. (Vol. 1, p. 339.) 

Indirect Trafftc Between the United States and India via Europe. 

As already stated, much of the trade between the United States and 
India moves indirectly via Europe, especially where quick and effi¬ 
cient transportation is required. Judging from the reports received 
by the Committee from the American Consular representatives sta¬ 
tioned at the leading ports of India, the European lines engaged in 
this indirect trade have, in nearly all instances, entered into agree¬ 
ments^ with each other for the maintenance of rates and regulation 
of competition. In this connection it should be recalled that the 
relations between the trans-Atlantic lines connecting at European 
transshipment ports with the lines operating to and from India have 
already been explained in the section dealing with freight agree- 

1 In its report to the Committee the .\merican & Indian Line explains its service as 
extending from New York to Port Said, Aden, Karachi, Bombay, Colombo, Madras, Cal¬ 
cutta, Rangoon, and occasionally, according to the requirements of shippers, to other 
Red Sea, Indian and Burmese ports. 




AGREEMENTS IN THE AMERICAN-ASIATIC TRADE. 125 

. merits in the American-European trade. The special consular reports 
received by the Committee may be briefly summarized as follows: 

(1) Karachi Trade. —Mr. Stuart K. Lupton, American 
Consul at this port, advised the Committee that the Hansa Line 
(one of the two services operating under the name of the American 
and Indian Line) is the only company running direct boats from the 
United States to Karachi. He also reports that nearly all the ship¬ 
ments to the United States from this port go by the City and Hall 
lines to Liverpool, or by the Wilson Line to Hull, and are there 
transshipped. These English lines were reported by the British 
Royal Commission on Shipping Rings to be members of the Karachi 
Outward Conference, governing the trade from the United Kingdom 
and Continental Europe to Karachi. (Vol. 2 of the Commission’s 
report, p. 7.) 

(2) Bombay Trade .—According to the report of Mr. 
Edward J. Norton, American Consul at Bombay, a large number of 
lines are engaged in the indirect trade between the United States 
and Bombay, receiving or delivering cargo at transshipment ports 
such as London, Liverpool, Marseille, Genoa and Trieste.^ Practi¬ 
cally all of these lines are members of the several “ Outward ” and 
“ Homeward ” Conferences governing the traffic between European 
and Indian ports. (See report of the British Royal Commission on 
Shipping Rings, vol. 2, pp. 5-8.) Mr. Norton reports that “As far 
as competitive rates are to be considered current quotations to the 
United States are not placed at a figure likely to check or hinder 
the movement of commodities. As a matter of fact there is no 
difference in the measured cargo rates between the consignments 
destined direct and those transshipped at London for New York 
or consignments from Bombay to the port of London. Measured 
cargo on prevailing freight rates to Venice or Trieste is only Is. Cd. 
per ton cheaper than to New York.” 

The Bombay-American Line, with monthly sailings, is the only 
direct line taking cargo from Bombay to New York, Boston, Phila¬ 
delphia or Baltimore. According to the Hansa Line’s report to the 
Committee this line, as in the case of the American & Indian Line, 

1 In his report Mr. Norton enumerates the following lines as engaged in this indirect 
trade : The Peninsular A Oriental Steam Navigation Co., Hall, City and Anchor Lines, 
Compagnie des Messageries Maritimes, Austrian Lloyd, Nippon Yusen Kaisha and Toyo 
Risen Kaisha. 



126 AGREEMENTS IN THE AMERICAN-ASIATIC TRADE. 

represents a joint service of the Hansa Line, Bucknall Steamship 
Lines, Ltd., and Andrew Weir & Co. 

(3) Madras Trade ,—Aside from the direct traffic of the 
American & Indian Line, a large portion of the trade westbound 
is carried by the Pacific & Oriental Steam Navigation Co., British 
India Steam Navigation Co. and the Clan, Hall and City Lines, 
with transshipment at English ports. These lines are all members 
of the Madras Homeward and Madras Outward Conferences, and 
according to the report of the British Royal Commission on Ship¬ 
ping Rings (vol. 2, p. 7), the Madras Homeward Conference relates 
to “ the trade from Madras and Pondicherry to the United Kingdom, 
the United States and Marseille.” 

The freight rates fixed by the Madras Outward Conference are 
' published in two tariffs, dealing respectively with rates of freight 
on “ general cargo ” and “ choice cargo,” homeward from Madras 
‘‘by conference steamers.” (Vol. 3, p. 163.) Mr. Jose'de Olivares, 
Consul at Madras, reports that the lines constituting this conference 
also grant a deferred rebate of 10 per cent to local shippers every six 
months, in consideration of their exclusive patronage, and that rebates 
covering three months are held in reserve. (Vol. 3, p. 161.) 

(4) Rangoon Trade .—Shipments in the westbound trade 
are mostly made on through bills of lading by the Bibby and Hender¬ 
son Lines for transshipment at Liverpool, and by the Hansa Line for 
transshipment at Bremen. These three lines are reported to have 
entered into a pooling arrangement in 1906 (vol. 3, p. 155) and to 
have arranged for the payment of a deferred rebate of 10 per cent 
on merchandise consigned to Continental Europe, the United King¬ 
dom and the United States (whether direct or by transshipment), 
six months’ rebates being kept in reserve. The rebate circular fur¬ 
nished to the Committee (published in vol. 3, p. 157) does not 
specifically state that rebates are granted to shipments consigned to 
America, but Mr. Maxwell K. Moorhead, Consul at Rangoon, in¬ 
formed the Committee that the local agents of the lines advised him 
that the rebates do apply to shipments consigned to Eastern ports of 
the United States (vol. 3, p. 155). The rebate circular also declares 
that “ shipments by steamers of the British Indian Steam Navigation 
Co. and the Asiatic Steam Navigation Co. will not invalidate the 
claims for the above rebate, provided they charge tariff rates.” 


AGKEEMENTS IN THE AMERICAN-ASIATIC TRADE. 


127 


Steamship Agreement in the American-Java Trade. 

The direct service to Java is conducted under a joint arrangement 
between the Hansa Line and the German-Australian Steamship Co. 
Both lines have Funch, Edye & Co. as their agents in New York, and, 
according to the Flansa Line’s report to the Committee, the joint 
service of the two lines to the Dutch East Indies was established to 
give American shippers an opportunity to ship by direct steamers, 
whereas previously all American cargo had to be shipped via Hol¬ 
land. The tonnage is supplied as follows by the two lines: first, 
six steamers per annum are furnished by the Hansa Line; then the 
German-Australian Line supplies 6, should more than 6 and up to 
12 steamers be required; and in case more than 12 steamers are neces¬ 
sary for the accommodation of the trade, the excess is to be supplied 
by both companies in turn. It appears that the Hansa Line was first 
engaged in this direct trade and that the arrangement with the 
German-Australian Line was effected because of the latter line’s 
European service to Java and the fear that unless an agreement 
was reached trouble was bound to ensue. (Vol. 1, p. 340.) 

American export traffic from the Atlantic Coast to Java directly, 
like the direct trade to India, has only had a recent origin, practically 
all the trade to Java, prior to the inauguration of this service, having 
been controlled by Dutch firms. Mr. Gottheil testified (vol. 1, p. 
340) that “ with the exception of pipes for oil wells for Sumatra and 
Borneo, there really is very little traffic from this country to Java 
and it had nearly always gone via Kotterdam. The business, there¬ 
fore, was only possible and could never have been entered into ex¬ 
cept, again, for a contract with the Standard Oil Co. to furnish a 
certain quantity of case oil—practically a whole cargo—with some 
latitude as to minimum and maximum, so as to enable us to work up 
a general cargo trade, and I will candidly confess that it has been 
a very disappointing business.” 

At present the two lines, representing the joint service, have a large 
contract with the Standard Oil Co., as well as agreements with the 
Oil Wells Supply Co. and the United States Steel Corporation. 
Owing to the fact, however, that the freight carried for these corpo¬ 
rations is competitive business with the tramp tonnage, the witness 
asked to be excused from revealing the rates charged under these con¬ 
tracts. (Vol. 1, p. 341.) 


128 


AGKEEMENTS IN THE AMEKICAN-ASIATIC TRADE. 


Agreements Among the Trans-Pacific Lines. 

Enumeration of the regular lines and the conferences to which they 
are parties. —The important trans-Pacific lines maintaining a more 
or less regular service between the American Pacific Coast and the 

I 

Far East are the following: 


Line. 

Nationality. 

Great Northern Steamship Co. 

American. 

Pacific Mail Steamship Co. 

Do. 

Nippon Yusen Kaisha. 

Japanese. 

Do. 

Toyo Kisen Kaisha, North American Line. 

Osaka Shosen Kaisha. 

Do. 

Canadian Pacific Ry. Co.’s Royal Mail Steamship Co. 

British. 

The Bank Line. 

Do. 

Blue Funnel Line (composed of China Mutual Steam Navigation 
Co. and Ocean Steamship Co.). 

Do. 

Dollar Steamship Co. 

Do. 


« 


In the eastbound trade all of the above lines, with the exception 
of the Dollar Steamship Co. and the “Blue Funnel Line” (which 
is reported to have seceded only recently), are members of the Hong- 
kong-China and Japan Branches of the Trans-Pacific Tariff Bureau. 
In the westbound traffic all of the lines operating from northern 
Pacific Coast ports are parties to the Trans-Pacific Tariff Bureau; 
whereas the Pacific Mail Steamship Co. and the Toyo Kisen Kaisha, 
which, with the exception of the Dollar Steamship Co., are the only 
lines of the above list to operate from San Francisco (and which 
do not call at northern Pacific Coast ports), have entered into an 
agreement with each other. 

The Dollar Steamship Line is apparently an independent com¬ 
pany, which although asked to enter the conference, declined to do 
so. (Report and Hearings of the Select Committee under H. Res. 
543, H. Rept. 2297, 61st Cong., 3d sess., p. 554.). Capt. Robert 
Dollar’s testimony before this Select Committee (pp. 554, 555) shows 
however, that this company’s steamers do not operate on regular 
schedule, and that the line is chiefly a private carrier. He testified 
that his boats are only “ very small competitors ” with the other reg¬ 
ular lines, and that he manages to keep his service occupied— 

by buying products and shipping for ourselves. Our entire cargoes from the 
American coast outward we buy ourselves. They are our own cargoes. And 
















AGREEMENTS IN THE AMERICAN-ASIATIC TRADE. 


129 


coming home we have been crowded into engaging merchandise, which we did not 
want to do. In order to provide cargoes we have been obliged to accept iron 
and oak and other commodities which we have been forced to buy. Otherwise 
we could not have secured trade for our ships. 

He further testified that the combination of other lines still per¬ 
mits his company’s vessels to engage in the Chinese trade, but that in 
the Japanese trade his company has been entirely crowded out (Re¬ 
port under H. Res. 543, pp. 554 and 564) except where the cargoes 
are actually purchased. The elimination of his line Capt. Dollar 
attributed to the combination’s use of the deferred rebate system in 
the eastbound Japanese trade, whereby shippers are promised a re¬ 
bate if all their shipments are confined to the steamers of the com¬ 
bination lines, the same to be forfeited if any shipment is made by 
the boats of the Dollar Steamship Co., or any other nonconference 
steamer. This practice, according to the witness, means that “ we 
were prohibited from doing business because the people wanted a 
regular service, and knew that they would get this rebate at the end 
of the year. The effect of it was that I have completely gone out of 
the Japanese trade. We are not in the trade except where we buy 
cargoes ourselves, which we are doing.” 

Nature and purpose of the conferences in the easthound trade ,— 
As already indicated the eastbound traffic of all the regular lines is 
governed by two conferences, one (with headquarters in Hongkong) 
consisting of the Hongkong and China agents of the lines and 
called the “ Trans-Pacific Tariff Bureau (Hongkong and China 
Branch)”; and the other (with headquarters in Yokohama) consist¬ 
ing of the Japanese agents of the lines and called the “ Trans-Pacific 
Tariff Bureau (Japan Branch).” These two conferences have juris¬ 
diction respectively over all Chinese and Japanese ports and do not 
overlap each other. (Vol. 2, p. 889.) The Committee’s information 
is also to the effect that there is no relation by way of any agreement 
between the Trans-Pacific Tariff Bureau in the eastbound trade and 
the similarly named Bureau in the westbound traffic, although the 
same lines, with the exception of the two San Francisco lines, are 
parties to both. The officers of several of the lines have reported to 
the Committee under oath that westbound freight is not affected in 
any way by the eastbound agreements. Moreover, the Trans-Pacific 
and Suez-Atlantic Conferences are separate and distinct. (Vol. 3, 
p. 184.) 

25655°— VOL 4—14-9 



130 


AGREEMENTS IN THE AMERICAN-ASIATIC TRADE. 


According to the replies of the Pacific Mail Steamship Co.’s 
Freight Traffic Manager to the Committee’s Schedule of Inquiries, 
the agents of the various lines parties to the two Branches of the 
Trans-Pacific Tariff Bureau meet at regular intervals and discuss the 
conditions of the trade as they arise from time to time, especially as 
they are affected by the competition of tramp vessels, and “ decide 
on the policy to be pursued by all the lines named with reference to 
the maintenance of stable rates of freight and to prevent demoraliza¬ 
tion.” He regarded as the most essential feature of the Bureau, the 
deferred rebate system adopted by the lines in the Japanese trade, 
whereby shippers who send their freight exclusively by the regular 
lines belonging to the conference will be accorded the reduced rates 
of freight as shown by the deferred rebate agreement adopted by the 
lines. 

Again, Mr. Schwerin testified that the trans-Pacific lines are in 
competition with the Suez lines as regards large quantities of freight 
consigned to the interior of the United States. As regards this com¬ 
petitive traffic, the trans-Pacific lines, organized in conference: 

are watching the Suez rates all the time and conferring together to keep the 
business from all moving via the Suez to the United States—that is, they work 
together to make the rates flexible, so as to hold a certain portion of that business 
to the trans-Paciflc lines and the trans-Continental railroads. That same thing 
follows in Japan; they are in competition with the all-water route through the 
Suez to New York and for distribution into the United States, and they are 
working together against the other conference crowd to swing the business 
across the Pacific and through the Pacific Coast gateways into the interior 
cities of the United States. (Vol. 2, p. 889.) 

It remains to be stated that the Managers of the Bank and Blue 
Funnel Lines have reported to the Committee that the trans-Pacific 
lines are not parties to any pooling arrangement, and that the Trans- 
Pacific Tariff Bureau involves no agreement among the parties thereto 
for the division of traffic, territorial division of routes, discontinuance 
of any service between designated ports by any of the lines, or the 
regulation of the time and number of sailings. 

The Trans-Pacific Tariff Bureau {Japan Branch ).—This branch of 
the Bureau issues two tariffs, viz, a local port-to-port tariff and a 
tariff of eastbound proportional rates, both being issued by Mr. 
M. Fitz-Gerald as agent respectively for the “ Trans-Pacific Tariff 
Bureau ” and the “ Trans-Pacific Overland Tariff Bureau.” The 
various lines, upon request, furnished the latest copies of these 


AGKEEMENTS IN THE AMEKICAN-ASIATIC TRADE. 131 

two tariffs (both issued February 1, 1^12), viz, “Freight Tariff 
No. 2, specifying minimum rates of freight from Japanese ports 
(Nagasaki, Moji, Kobe, Yokkaichi, Shimidzu and Yokohama) to 
Victoria, Vancouver, Seattle, Tacoma, Portland and San Francisco, 
by the following undersigned lines: The Bank Line, Canadian Pa¬ 
cific Railway Co.’s Royal Mail Steamship Lines, China Mutual Steam 
Navigation Co., Great Northern Steamship Co., Nippon Yusen Kai- 
sha, Ocean Steamship Co., Osaka Shosen Kaisha, Pacific Mail Steam¬ 
ship Co. and Toyo Kisen Kaisha ” (vol. 3, p. 195); and “ Tariff 
No. 4,” naming eastbound proportional rates from all the aforemen- 
tioned ports of call in Japan to the aforementioned points in the 
United States and Canada. 

As already stated the essential feature of the Japan Branch of the 
Bureau is the deferred rebate system adopted by the lines. Both 
tariffs referred to above make provision for the payment of such 
rebates. Freight Tariff No. 2, applying only to the port-to-port 
traffic, specifies that “ With the exception of raw silk, silk goods, 
cement, lumber, and timber, the rates are subject to a deferred rebate 
of $1 gold per ton, weight or measurement. Cement is subject to a 
deferred rebate of 10 cents gold per cask, and lumber and timber are 
subject to a deferred rebate of $1 gold per 1,000 feet b. m.” (Vol. 3, 
p. 194.) Tariff No. 4, on the other hand, provides that: “ In the tariff 
of eastbound proportional rates a deferred rebate of 20 per cent off 
the ocean proportion of the through rate is granted on all rates with 
the exception of those on raw silk, silk goods and crude camphor.” 
(Vol. 3, p. 195.) 

Several of the lines furnished the Committee copies of their last 
deferred rebate agreement (all copies were dated February 25, 1911), 
and as illustrative of the nature of the agreement adopted the copy 
submitted by the Pacific Mail Steamship Co. is herewith reproduced: 

PACIFIC MAIL STEAMSHIP COMPANY. 

Dear Sirs : To those exporters from Japan Ports to Pacific Coast Ports of 
the United States and Canada, who, from the 15th February, 1911, to the 31st 
December, 1911, may have found it to their interest to confine their support and 
shipments to the Pacific Mail Steamship Co. we have decided to allow a rebate 
on the freight paid as per Bill of Lading, as follows: 

On Pacific Coast Cargo: 

All cargo (except Raw Silk, Silk Goods, Rice, Peanuts, and Cement), a 
rebate of $1.00 gold per ton weight or measurement as per Bill of Lading. 

Raw Silk, Net. 


132 


AGREEMENTS IN THE AMERICAN-ASIATIC TRADE, 


On Pacific Coast Cargo—Continued. 

Silk Goods, Net 

Rice. 

Peanuts. 

Cement, a rebate of 10 cents per cask. 

On Ocean Proportion of through rates to Overland Points: 

All cargo (except Raw Silk and Silk Goods) a rebate of 20 per cent off 
the Ocean proportion of the through rate. 

Raw Silk, Net. 

Silk Goods, Net. 

On the 1st July, 1911, to those exporters from Japan, who, from the 15th 
February, 1911, to the 30th June, 1911, may have found it to their interest to 
confine their support and shipments during that period to the Pacific Mail 
Steamship Co. we shall be glad to allow a return of fifty per cent of the above 
rebate on the freight paid as per Bill of Lading. 

On the 2nd of January, 1912, to those exporters who, on the 31st December, 
1911, may have found it to their interest to confine their support and shipments 
during the previous ten and a half months to the said Line, we will allow a 
further fifty per cent, of the above rebate, on freight contributed from the 
15th February, 1911, to the .30th June, 1911, and fifty per cent of the above 
rebate on freight contributed during the six months from the 1st July, 1911, to 
the 31st December, 1911. 

On the 1st July, 1912, to those exporters, who, on the 30th June, 1912, have 
found it to their interest to confine their support and shipments during the 
previous sixteen and a half months to the said Line, we will allow a further 
fifty per cent of the above rebate on freights contributed during the six months 
from the 1st July, 1911, to the 31st December, 1911, and fifty per cent on 
freights contributed during the six months from the 1st January, 1912, to the 
30th June, 1912. 

Until further notice future rebates will be payable Semi-Annually on the same 
terms and conditions as above set forth. 

Until further notice, shipments made by the Toyo Risen Kaisha, Portland & 
Asiatic S. S. Co., Canadian Pacific Railway Co.’s Royal Mail Steamship Line, 
Nippon, Yusen Kaisha, Great Northern S. S. Co., Ocean S. S. Co., Ltd., China 
Mutual S. N. Co., Ltd., The Bank Line, Ltd., and Osaka Shosen Kaisha, will 
not invalidate claims for the above. 

No rebates will be payable to any exporter, shipper or consignee who has 
accepted concessions of any nature from any steamship Line other than the 
above agreed rebates. 

Exporters applying for the rebate which will be payable in Yokohama and 
Kobe on and after the 1st of July, 1911, 2nd January, 1912, and 1st July, 1912, 
respectively, must fill up and sign forms in accordance with the above terms 
and conditions. 

These forms can be obtained from the Agents of the Company. 

Yours truly, 

(Sgd) 

Yokohama, January 25th, 1911, 


B. C. Howard, Agent, Yokohama. 


AGREEMENTS IN THE AMERICAN-ASIATIC TRADE. 


133 


(For a sample copy of the form referred to, which exporters 
applying for the rebate must fill and sign in accordance with the 
terms and conditions of the agreement, see the form used by the 
Osaka Shosen Kaisha, reproduced in vol. 3, p. 198.) 

Trans-Pacific Tariff Bureau (Ilonghong cfi China Branch ).—This 
Branch of the Bureau differs from the Japan Branch in two im* 
portant particulars. In the first place it issues only a joint tariff 
of ‘‘ eastbound proportional commodity rates,” the lines having filed 
with the Committee the last issue of the so-called “ Hongkong Tariff 
No. 4” (also dated Feb. 1, 1912) “naming eastbound proportional 
commodity rates from Hongking, Keelung and ports of call in China 
and the Philippines to overland common points named in Trans-. 
Continental Freight Bureau’s Tariff S. R. 1010,” and applying by 
all of the nine lines which were named on the tariffs issued by the 
Japan Branch of the Bureau. (Vol. 3, p. 176.) Unlike the Japan 
Branch, the Hongkong & China Branch does not issue a port-to-port 
tariff. Mr. R. P. Schwerin testified (vol. 2, p. 889) that he did not 
believe that this Branch of the Bureau had “ very much to do with 
the port-to-port rates,” and that it “ has nothing whatever to do with 
our local Chinese business originating in Hongkong and destined to 
San Francisco, this traffic being entirely outside of their jurisdiction.” 
The rates considered in this conference seem to relate more particu¬ 
larly to such commodities as move in large volume and which are 
destined to interior points of the United States. This traffic, as 
pointed out by Mr. Schwerin, is in competition with the Suez lines, 
and it is in this connection that the trans-Pacific lines, as already 
explained, come together in conference for the purpose of watching 
the competitive situation with a view to diverting as much of that 
traffic to the associated water lines and transcontinental railroads as 
possible. 

Secondly, the Hongkong & China Branch of the Bureau has made 
no arrangements in its tariff for the granting of deferred rebates to 
loyal shippers. Mr. George E. Anderson, Consul General at Hong¬ 
kong, reports to the Committee (vol. 3, p. 170) that: “the Trans¬ 
pacific Conference in Hongkong is held together as a matter of main¬ 
taining net rates without rebate,” and that at Hongkong shipments 
are made largely by Chinese firms, which can not be watched like 


134 


AGREEMENTS IN THE AMERICAN-ASIATIC TRADE. 


the exporters from Japan, who are registered and whose shipments 
can be traced. He states that: 

Ordinarily a Chinese firm shipping to the west coast would make a shipment 
by any tramp steamer coming along and offering a better net rate than a 
conference ship, concealing the shipment under a false name or the name of 
some other firm and later claiming any rebate from the conference lines for 
shipments by conference steamers, notwithstanding the lapse frorn^ the re¬ 
quirement that all shipments from such firm should be made by conference 
steamers. In Hongkong there is no proper registration of firms and shippers, 
no customs or other declarations by which shipments can be traced, and it is 
generally considered impossible to employ the deferred rebate method of con¬ 
trolling shipments. (Vol. 3, p. 170.) 

Mr. W. K. Dorsey, American Consular Representative at Shanghai, 
likewise reports that: 

Across the Pacific, as far as I have been able to learn, no rebates are granted 
on freights, although such lines as the Pacific Mail, Canadian Pacific, Toyo 
Kisen Kaisha, and Nippon Tusen Kaisha maintain the same scale. When 
tramp steamers, such as those of the Dollar Steamship Go., are on the berth, 
all the above-mentioned lines reduce rates to meet those of the outsider, thus 
demonstrating the absence of deferred rebates, as in the case of the Suez con¬ 
ference. (Vol. 3, p. 177.) 

Threatened disruption of the Trans-Pacific Tariff Bureau East- 
hound. —Not only have the associated lines found it impossible to 
pursue more than a protective policy against abnormally low rates 
brought about by outside competition, but even among themselves it 
has proven most difficult to secure an adherence to the conference 
rates. From numerous sources the Committee has been advised 
that some of the lines, particularly the Japanese lines, have dis¬ 
played a disposition to cut rates in one way or another and that* 
this action has threatened the dissolution of the conference. It is 
charged that the Japanese lines in particular have violated the 
spirit of the conference arrangement in the following ways: 

(1) By the secret cutting of rates. —Mr. R. P. Schwerin 
testified (vol. 2, p 891) that “ Shipper after shipper has claimed 
that the Pacific Mail Steamship Co. ought to meet the condi¬ 
tions of the Japanese lines and give a return, which we declined 
to do. * * * I know the Japanese lines were not living up to 

their agreement because the movement of tonnage showed it.” So 
common has been the practice of secret cutting of rates that it was 
recently proposed that each member of the Hongkong Conference 


AGREEMENTS IN THE AMERICAN-ASIATIC TRADE. 135 

should deposit $50,000 local currency, this sum to be the property 
of, and subject to the orders of, the conference, and to be forfeited 
in case of any infraction of the conference rules. Although such 
penalties have been adopted by the Atlantic-Suez and the Calcutta- 
Pacific Conferences at Hongkong, the Committee is advised that 
this plan has not yet been adopted by the Trans-Pacific Tariff 
Bureau. (Keport of George E. Anderson, Consul General at Hong¬ 
kong, vol. 3, p. 170.) 

(2) Through presents^ etc.^ inducing shipping clerhs of 
firms to send freight hy their steamers, —Owing to the heavy sub¬ 
sidies paid to the lines by the Japanese government, it is claimed, 
these inducements can be offered and still leave a profit, although 
the lines charge the same rates as the other conference lines. (Ke¬ 
port of W. K. Dorsey, Vice Consul General at Shanghai, vol. 3, 
p. 178.) 

(3) By underweighing the freight. —According to this 
practice the steamship company accepts the favored shippers’ state¬ 
ments of weight on the bills of lading without regard to their cor¬ 
rectness. This false billing of the freight is done with the knowl¬ 
edge of the lines. “ During the tea season of 1911,” as reported by 
Ambassador C. P. Bryan (vol. 3, p. 202) — 

the abuse became so extensive—according to a leading local merchant—that the 
tea exporters complained to the conference. As a result the Yokohama man¬ 
ager of one of the conference lines privately advised a certain exporter to 
enter his own weights on the bills of lading and nothing would be said, as 
all of the lines allowed this practice. Following this complaint an official 
weigher was appointed by the conference lines, but it is still the practice 
to allow shippers to make out their own bills of lading. The weights given 
by the shippers are supposed to be checked with those ascertained by the 
official weigher, but as the checking is done by the steamship lines and not 
by the weigher, the opportunity for the “underweighing process” has not 
thereby been lessened. 

Mr. K. P. Schwerin substantiated Ambassador Bryan’s state¬ 
ment in the following testimony before the Committee (vol. 2, 
p. 894) : 

We wanted to use an official measure on tea and forced that issue. We 
tried through shippers before the Interstate Commerce Commission to have 
the tea measured that came in by the Japanese lines but they would not take 
any action on the matter. They finally got behind the Japanese government 
and the Japanese government served notice that they did not deem it advisable 
to measure it. There has been so much skullduggery by the Japanese ship- 


136 


AGREEMENTS IN THE AMERICAN-ASIATIC TRADE. 


owners taking cargoes out of Japan without official measuring, that we wanted 
to put a measure on all business done with the United States. We have had 
it on some articles, but not on tea; they would not agree to it. * • * 

Another way to ^et around the agreement is to take the shipper’s weight 
and count, and measure it 25 per cent off. A man who ships a thousand tons 
of freight, gets a bill of lading calling for 800. * ♦ ♦ 

But above all it must be remembered that the Japanese government docs 
everything it possibly can to compel the Japanese to ship in Japanese bottoms. 
That is a fundamental principle over there, and not only for the cargo out of 
the country, but imports into the country. I know of a firm in Japan whose 
business we handled for 15 years, which for the sake of some money went 
over to the Japanese. I told that firm that the Japanese lines would put them 
out of business. They asked why. I said: “ Why the government will have 
every manifest and the name of every shipper and client you have in the United 
States.” 

Owing, it is said, to the corrupt methods of competition practiced 
by the lines belonging to the conference and in which it did not care 
to participate in order to secure its proper share of the trade, the 
Blue Funnel Line seceded from the trans-Pacific Conference in May, 
1912. (Vol. 3, p. 210.)^ This secession of the line almost led to the 
dissolution of the conference, this outcome having been averted by 
the demands of the tea producers who insisted that the lines reunite in 
the protection of their mutual interests. The Blue Funnel Line, 
however, the Committee has been advised, “ is not large enough to 
enable it to compete with the conference, and that its service is not 
sufficiently frequent to make it advisable or profitable for large ship¬ 
pers to, relinquish their rights as parties to the conference by ship¬ 
ping by nonconference lines, even at lower rates.” (Vol. 3, p. 210.) 
Immediately following the secession, the conference lines took action 
against the Blue Funnel Line. On May 15, 1912, the conference 
issued to shippers the following notice, (emphasizing again the 
sigTiificance of the deferred rebate system), regarding the Blue Fun¬ 
nel Line: 

Notice is hereby given that from this date any shippers or exporters for¬ 
warding cargo of any description to Pacific coast ports or overland points in 
the United States and Canada by the Ocean Steamship Co. (Ltd.) and China 
Mutual Steam Navigation Co. (Ltd.) (Blue Funnel Line) will invalidate all 

1 The American management of the Blue Funnel informed the Committee by letter, 
under date of August 13, 1912, that Messrs. Waterfleld and Swire, agents of the Blue 
Funnel Line in the Orient, advised them that the line withdrew from the Trans-Pacific 
Tariff Bureau in Japan. According to this letter, the reason given for the withdrawal 
was that ” other members of the Bureau were not adhering to the tariff rates.” 




AGKEEMENTS IN THE AMEMCAN-ASIATIC TRADE. 137 

claim to participate in the deferred rebates payable by the undersigned. (Vol. 
3, p. 210.) 

Influence of Trans-Paciflc Gonferences on rates. —The general ob¬ 
ject of the conferences with reference to freight charges has appar¬ 
ently been to prevent ruinous competition rather than to maintain 
unduly high rates. The opinions of foreign firms, exporting from 
the Orient to the United States, seem in the main to approve the con¬ 
ferences as beneficial, in that they serve to bring about regularity in 
service and steadiness in rates, thus eliminating the hazards of specu¬ 
lation which result from fluctuating rates and irregular sailings. 
Generally speaking these firms also regard the rates of the lines as 
reasonable when judged by the increase in charter rates the world 
over. (Vol. 2, pp. 208-210.) 

American exporting and importing firms, likewise, seem in the 
great majority of instances to regard the rates, both via the Pacific 
and via Suez, as reasonable considering the long haul, and as 
fair to American interests from the standpoint of competition with 
foreign markets. In fact, the Committee has received fewer com¬ 
plaints from shippers in the Oriental trade than from those engaged 
in any of the other leading foreign markets. Twenty-eight leading 
importing and exporting firms, representing both the trans-Pacific 
and Suez routes, replied to the Committee’s circular letter of Febru¬ 
ary 18, 1913. (For copy of letter, see vol. 2, p. 1398.) With the 
exception of only eight, these replies supported the contentions of the 
steamship line representatives, viz, that the tonnage is ample and the 
rates reasonable. Of the above-mentioned eight complaints, how¬ 
ever, only three regard the rates unduly high, the most general criti¬ 
cism relating to the alleged inadequacy in tonnage facilities. Most 
of the above-mentioned firms voice the general conclusion that the 
organization of steamship interests into well-organized units for the 
conduct of the trade has produced much better results for exporters 
and importers than existed prior to the adoption of conference ar¬ 
rangements. Merchants, it is stated repeatedly, are not obliged to 
face conditions of absolute uncertainty as regards rates and shipping 
opportunities, and all are thus placed upon the same basis in their- 
estimates on contracts. 

The water rates between Hongkong and New York are much 
higher, comparatively, than those via the Pacific. Although the 
through rates from the Eastern portion of the United States via the 


138 


AGREEMENTS IN THE AMERICAN-ASIATIC TRADE. 


Pacific are higher than the rates via Suez, the water proportion of 
the trans-Pacific through rates is only about one-third to one-fourth 
of the whole rate. Trans-Pacific water rates are regarded as excep¬ 
tionally low considering the long haul, and the testimony before the 
Committee seems to indicate that some of the lines, especially the 
Japanese companies, are constantly showing a disposition to break 
existing rates. Mr. E. P. Schwerin testified (vol. 2, p. 888) that the 
regular line rates from San Francisco, for example, are lower than 
those prevailing at present in the charter market. North Pacific 
Coast line representatives likewise reported to the Committee 
(August, 1912) that the rates in effect by the regular lines are much 
lower than are obtainable by extra or tramp steamers, and that tramp 
vessels can not afford, owing to the great demand for tonnage at 
present, to operate on the trans-Pacific route on the basis of the liners’ 
rates. Most of the complaints, in fact, which the Committee has re¬ 
ceived from Pacific Coast importing and exporting firms relate to 
the disposition of the Japanese and certain other lines to underquote 
existing rates, thereby seriously disturbing the stability of rates, a 
factor which the shippers regard as of the utmost importance. 

Trans Pacific Tariff Bureau {fWestbound ),—^With reference to the 
movement of freight from Portland, Tacoma, Seattle, Victoria, Van¬ 
couver and New Westminister to Asiatic common points, seven lines 
(Canadian Pacific Railway Co.’s Steamship Lines, Nippon Yusen 
Kaisha, China Mutual Steam Navigation Co., Ocean Steamship 
Co., Bank Line and Osaka Shosen Kaisha) publish a common tariff 
from the above-mentioned Pacific ports to Yokohama, Kobe, Naga¬ 
saki, Moji, Shanghai, Hongkong, Manila and numerous other points. 
All of the lines which replied to the Committee’s request for current 
rates westbound submitted the Trans-Pacific Tariff Bureau’s Freight 
Tariff No. 10, effective June 1,1912. This tariff, the title page of which 
contains the names of all the aforementioned lines, expressly states 
that “ this tariff contains individual rates, rules, and regulations of 
each company respectively, and is subject to change by each company 
without the consent of any other company whose name appears 
hereon.” 

Messrs. Dodwell & Co., general agents of the China Mutual and 
Ocean Steamship Lines, both members of the Trans-Pacific Tariff 
Bureau (Westbound), informed the Committee that “ no other agree¬ 
ment than the tariff exists,” and that “ the Bureau is not a corpora- 


AGREEMENTS IN THE AMERICAN-ASIATIC TRADE. 


139 


tion; has no articles of association; there are no officers, other then 
the joint agent who issues the tariff; and the publication of the tariff 
is handled'through the agent in exactly the same manner as by the 
Transcontinental Freight Bureau.” The same party further states 
under oath that the various north trans-Pacific lines engage a joint 
agent in Seattle to publish their freight rates, but that the companies 
have no written agreement relative to the tariffs issued by the 
Bureau; that there is no penalty for failure of any of the lines to 
abide by the tariff; and that the tariff is changed whenever an indi¬ 
vidual member considers it advantageous to do so. 

The Bank Line representatives verify this information in their 
answers to the Committee’s Schedule of Inquiries. They state that 
their line “ employs, in conjunction with the regular trans-Pacific 
lines, an agent in Seattle with a view to publishing freight rates 
which are as nearly as possible uniform.” Both answers include an 
admission that the associated lines generally observe the rates as 
published in the joint tariff. The Bank Line states that “ each line 
is free to fix its own rates, but usually, not always, the rates between 
the different lines for the same service are uniform ”; while the China 
Mutual & Ocean Steamship Lines assert that, “ the published rates 
are usually uniform, but not necessarily so, and are published for the 
convenience of both the shippers and the owners of the steamers.” 
The lines further assert that there are no deferred rebates, or special 
privileges of any nature granted to some shippers and denied to 
others on westbound freight. 

Understanding between the Pacific Mail Steamship Go. and the 
Togo Risen Kaisha Westbound from San Francisco. —The member¬ 
ship of the Trans Pacific Tariff Bureau (Westbound) is confined to 
the north Pacific Coast lines and does not include the two regular 
lines operating from San Francisco to the Far East, viz.. The Pacific 
Mail Steamship Co. and the Toyo Kisen Kaisha. As regards these 
two lines, the Toyo Kisen Kaisha submitted to the Committee a memo¬ 
randum of the agreement (made in August, 1911) for the appointment 
of the Judson Freight Forwarding Co., at Chicago and New York, 
as joint agent for both companies for the collection and shipment of 
through cargoes to the Orient, via the Western Pacific Kailway Co. 
to the point of transshipment on the Pacific Coast, and then via the 
first sailing of either of the steamship companies which may have a 


140 


AGREEMENTS IN THE -AMERICAN-ASIATIC TRADE. 


ship with available space loading on the berth at the time of arrival 
at San Francisco, to the point of destination in the Orient. In order 
to obtain the best results under this arrangement, it was agreed that 
“ a joint schedule of sailings shall be prepared for the year 1912 along 
lines similar to those which have been in effect during the past years, 
which shall provide for seven steamers for the Pacific Mail Steam¬ 
ship Co. and four steamers for the Toyo Kisen Kaisha; with the 
exception that the new schedule, when made up, may provide for five 
direct calls by the steamers of the Toyo Kisen Kaisha to the port of 
Manila.” It is further agreed (1) that “cotton arriving over the 
lines of the Western Pacific Kailway, Southern Pacific and Sante Fe 
is to be forwarded by the first sailing after arrival, and that the same 
privilege be extended to other freight moving, in addition to that 
already provided for under the Judson Forwarding Co.’s agreement, 
provided such steamer on the loading berth at the time has available 
space”; and (2) “that the same conditions that are now and have 
been in effect for the year 1911 governing passenger traffic, and as 
to the exchange and interchange, as well as lay-over privileges on all 
issues of first-class tickets by either of the steamship companies shall 
be continued up to and including December 31, 1912.” 

The events which led to the making of this arrangement are well 
explained in the testimony of Mr. R. P. Schwerin. (Vol. 2, p. 881 
and following.) He testified that when the Interstate Commerce 
Commission ordered the railroads to publish their proportional rates, 
and the railroads serving San Francisco declined to do so, the freight 
of the Pacific Mail and the Toyo Kisen Kaisha to the Orient was 
entirely cut off. This refusal on the part of the railroads to publish 
proportional rates meant that the rail rates applying to the Pacific 
Coast were the local rates, because all rates not filed with the Inter¬ 
state Commerce Commission became illegal. Prior to this require¬ 
ment of the Interstate Commerce Commission there existed an agreed 
division of rates between the railroads and the water lines on out¬ 
ward business. The railroads received two-thirds of the total rate 
on business which they originated and that two-thirds was much less 
than the local rail rate to San Francisco. When, however, the rail¬ 
roads charged the local rates, it meant that the rail-and-water rates 
through San Francisco (the local rates plus the ocean rates) were 
at least twice as high as the all-water rates via the Suez. In this 
connection it should be stated that the bulk of the Oriental business 


AGREEMENTS IN THE AMERICAN-ASIATIC TRADE. 141 

moving by rail via San Francisco originated in territory east of 
Chicago, i. 'e. in competition with the all-water route via Suez; and 
in this competitive trade the combination of the local rail rate plus 
the ocean rate made a prohibitory rate for the San Francisco lines 
as compared with the Eastern route. 

Following the development of this situation, the Toyo Kisen 
Kaisha entered into a traffic agreement with the Western Pacific 
Railway Co., whereby the two companies agreed to give their busi¬ 
ness to each other exclusively, the water line evidently hoping to de¬ 
velop a trade in this way. In consequence of this agreement the 
Pacific Mail made arrangements with the Judson Freight For¬ 
warding Co. in New York and Chicago to secure Oriental business 
at rates as low as $2 per ton for the ocean proportion. Freight de¬ 
veloped for the Pacific Mail as a result of this low rate. The Toyo 
Kisen Kaisha then proposed to either establish their own agency 
in the East as the Pacific Mail had done, because the railroads did 
not seem able to develop any business; or, like the Pacific Mail, to 
make the Judson Forwarding Co. their general agent and allow the 
freight, upon arrival in San Francisco, to go to any steamer of the 
two companies which might be on the berth. The latter plan proved 
agreeable to the Pacific Mail and is now in operation, as per the 
agreement already discussed. (Vol. 2, pp. 881-882.) 

Rates charged hy the Pacific Mail Steamship Go. and the Toyo 
- Kisen Kaisha Westbound from San Francisco. —As regards the traf¬ 
fic from San Francisco to Asiatic ports, including the East Indian 
and Straits Settlements ports, both companies furnished printed 
tariffs to the Committee. While each company issues its own tariff, 
the rates of the two tariffs were identical, and also agreed in all 
respects with the rates enumerated in the Trans-Pacific Tariff 
Bureau’s Freight Tariff No. 10, applying to the seven lines operating 
from north Pacific Coast ports. 

Reference should, however, be made at this point to the testimony 
of Mr. R. P. Schwerin (vol. 2, p. 884 and following) that the pub¬ 
lished tariff rates of the lines operating from San Francisco to the 
Orient are frequently cut; that the tariffs are made by the lines inde¬ 
pendently and without consultation; and that for legal reasons his 
line strictly avoids anything that seems like an agreement on rates. 

Agreements in the Japan-Hawaii and Japan-Philippine trade .— 
No steamship conference, according to the report of Ambassador 


142 AGKEEMENTS IN THE AMERICAN-ASIATIC TRADE. 

C. P. Bryan (vol. 3, p. 201), exists for the regulation of rates between 
Japan and Hawaii. The only two regular lines operating in this 
trade are the Pacific Mail Steamship Co. and the Toyo Kisen Kaisha. 
Although these lines are said not to have entered into any agreement 
with each other, they generally charge the same rates. These rates 
are reported to be considerably higher than those on cargo destined 
to the Pacific coast. 

In the Japan-Philippine trade nearly all of the trans-Pacific lines, 
as well as a number of the Atlantic-Suez Conference lines, maintain 
services. (Enumerated on pp. 182 and 204 of vol. 3.) “As far as 
can be determined,” reports Mr. Bryan, “ freight rates between 
Japan and the Philippines are not subject to conference regulation, 
but there appears to be an unbinding agreement among the lines con¬ 
cerned to maintain uniform rates.” (Yol. 3, p. 204.) 

Passenger Agreement in the Trans-Pacific Trade ,—The Committee 
is advised that in the westbound traffic of the northern Pacific Coast 
lines, the Trans-Pacific Tariff Bureau relates to passenger rates as 
well as to freight rates, and that when the lines faced a steerage rate 
war in 1910 the matter was presented to the Bureau. In answer to 
the Committee’s Schedule of Inquiries the Management of the Pacific 
Mail Steamship Co. states that there is an understanding between it 
and the northern Pacific Coast lines as to a territorial division with 
respect to the Asiatic passenger traffic. Under this arrangement the 
Pacific Mail Steamship Co. agrees not to solicit any business from 
points north of the California and Oregon State line, and the North¬ 
ern lines agree not to solicit any business south of that boundary. 
The Pacific Mail further states that, in connection with the foregoing 
arrangement, there is “ a general understanding with the northern 
Pacific Coast lines that any important changes in passenger rates or 
regulations shall be a matter of consultation or advice to them.” 

The Calcutta-Pacific Conference. 

The traffic from Calcutta to Hongkong for transshipment to the 
United States is governed by the so-called Calcutta-Pacific Con¬ 
ference. According to the approved memorandum of agreement for 
the year 1912 (this agreement is entered into annually), submitted 
to the Committee by the Pacific Mail Steamship Co., it appears that 
the agreement underlying this conference was entered into by the 
Bank Line, Canadian Pacific Kailway Co.’s Steamship Line, China 


AGREEMENTS IN THE AMERICAN-ASIATIC TRADE. 


143 


Mutual Steam Navigation Co., Great Northern Steamship Co., Ocean 
Steamship Co., Nippon Yusen Kaisha, Osaka Shosen Kaisha, Toyo 
Risen Kaisha and Pacific Mail Steamship Co. of the one part (known 
as the “Trans-Pacific Lines”), and the Indo-China Steam Naviga¬ 
tion Co., Ltd., and the Apcar Line (known as the “ Calcutta Lines ”) * 
of the other part. Mr. R. P. Schwerin, Vice President and General 
Manager of the Pacific Mail Steamship Co. testified (vol. 2, p. 879) 
that there has been an understanding for 20 years in the trade 
from Calcutta to American Pacific coast points, and that “ all the 
lines operating across the Pacific have worked under that agree¬ 
ment.” It should be noted that this conference has the same secretary 
as the Trans-Pacific Tariff Bureau (Hongkong and China branch), 
namely, J. Oram Sheppard. 

According to the above mentioned memorandum submitted to the 
Committee, the agreement governs the conveyance of all merchandise 
carried by the Calcutta lines from Calcutta to Hongkong for trans¬ 
shipment by the trans-Pacific lines to Vancouver, Victoria, Seattle, 
Tacoma, Portland, and San Francisco. The signatories agreed that 
from July 1, 1912 they will mutually adopt the scale of through 
rates for trans-Pacific cargo as settled by the yearly meetings of the 
conference at Hongkong. Any of the parties, however, may at any 
time summon a meeting of the conference for the purpose of con¬ 
sidering a revision of the scale of rates. At these meetings each line 
is represented by one delegMe, and the decisions of the conference 
must be unanimous. If any member of the conference is unable to 
bind his company to any of the decisions arrived at, owing to restric¬ 
tions or difficulties placed upon his company by the government of the 
country having jurisdiction over such line, that member shall, accord¬ 
ing to the agreement, make representations to the government in¬ 
volved with a view to removing such restrictions, and in case of 
failure the conference shall take such steps as may be deemed 
advisable. 

The freight received on merchandise coming within the scope of 
this agreement is distributed on the basis of one-third to the Calcutta 
lines and two-thirds to the trans-Pacific lines. Before the division 
is made, however, there shall be a deduction of 50 cents per ton to 
cover the expenses of transshipment, this sum to be paid to either 
the Calcutta line or the trans-Pacific line, whichever actually carries 


144 AGREEMENTS IN THE AMERICAN-ASIATIC TRADE. 

out the transshipment. Section 6 of the agreement, it should be 
noted, provides that: 

The transshipment lines undertake not to engage trans-Paciflc cargo except¬ 
ing for shipment at Calcutta by the Calcutta lines between Calcutta and Hong¬ 
kong and not to ship transshipment cargo unless shipped to Hongkong by the 
Calcutta lines; and the Calcutta lines undertake not to accept trans-Pacific 
cargo excepting for shipment at Hongkong by the trans-Pacific lines; and it is 
further mutually agreed that trans-Pacific cargo shall only be transshipped at 
Hongkong, unless the conference shall agree to any other port being the port 
of transshipment in any particular case. 

Numerous other provisions of the agreement refer to the deferred 
rebate plan adopted by the signatories. Such rebates on the through 
rates are granted to shippers who shall have observed the conditions 
of all the deferred rebate circulars issued at Calcutta by the con¬ 
ference, and are paid in the proportions of one-third thereof by the 
Calcutta line involved and two-thirds by the trans-Pacific line. 
These rebates are allowed on all shipments of gunnies and jut^ 
(excluding prison jute), provided the shipper has confined all of his 
shipments during specified periods to the steamers of the signatories. 
Payments of rebates are only made at Calcutta by the agents of the 
Calcutta lines. The following is given as an example of the amount 
of the rebates and the dates when the same become payable under the 
terms of the agreement: 

On shipments of gunnies and jute from July 1, to December 31, 1912: 

75 cents gold per ton of 40 cubic feet, payable June 30, 1913. 

75 cents gold per ton of 40 cubic feet, payable December 31, 1913. 

On shipments of gunnies and jute from January 1, to June 30, 1913: 

75 cents gold per ton of 40 cubic feet, payable December 31, 1913. 

75 cents gold per ton of 40 cubic feet, payable June 30, 1914. 

In connection with the deferred rebate provisions of the agreement 
the conference adopted an approved contract covering transporta¬ 
tion of merchandise from Calcutta to the Pacific coast, which is to be 
effected by the trans-Pacific lines involved and the consignee on the 
Pacific coast. According to this agreement the shipowner indicates 
that a deferred rebate shall be paid to the shipper of cargo imported 
by the importer from Calcutta to the Pacific coast in accordance with 
the deferred rebate circular last issued, a copy of which is annexed 
to the contract. On the other hand the importer agrees that: 

“All shipments of-ordered by him from Calcutta, whether 

on his own account or account of any connection of his, shall be 



AGREEMENTS IN THE AMERICAN-ASIATIC TRADE. 145 

carried exclusively by the ships of the shipowner so far as transporta¬ 
tion from Hongkong to the Pacific coast and by the line working in 
concert with the shipowner (to be notified to the importer) so far 
as transportation from Calcutta to Hongkong is concerned, and not 
by the ships of any other party over any portion of the route.” 

Further provision is made by section 8 of the agreement that 
should any shipper violate the conditions entitling him to a deferred 
rebate by shipping trans-Pacific cargo over the whole or any portion 
of the route by any line not a party to this agreement, or which may 
have ceased to be a party, “ it is agreed that such shipper shall not 
thereafter receive any rebate from any party to this agreement in re¬ 
spect to any trans-Pacific cargo exclusively shipped by him prior to 
such violation.” 

On the signing of the annual agreement, each of the parties thereto 
deposits for a period of one year in a recognized European bank in 
Hongkong the sum of $50,000, Hongkong currency. Such deposit is 
made out in the name of the Calcutta Trans-Pacific Conference, and 
the conference is entitled to cash or withdraw such deposit on the 
signature of any six of the parties thereto. Any party withdrawing 
from the agreement in accordance with the provisions thereof shall, 
provided there has been no violation of the agreement, be entitled to 
receive back the deposit with accrued interest. If, however, in the 
opinion of the majority of the conference any party thereto has 
violated the conditions of the agreement, the $50,000 deposited, to¬ 
gether with accrued interest, may be forfeited on the resolution of 
the majority of the conference and may be dealt with and applied 
in such manner as the majority may determine. All the members of 
the conference have agreed to abide by the decision of any such ma¬ 
jority of the members, regarding the forfeiture or application of the 
deposits and anj^ decision rendered by such majority is declared to be 
conclusive and binding on the party concerned, and beyond any 
appeal by way of legal proceedings. 

Agreements Between American Railways and trans-Pacific Steamship 

Lines. 

Nearly all the trans-Pacific lines, as indicated by the following 
table, have effected traffic agreements with the leading American 
trans-Continental railways. In about half of the instances each of 
these agreements provides for an exclusive working arrangement be- 
25655 '’— VOL 4—14 - 10 



146 


AGKEEMENTS IN THE AMEKICAN-ASIATIC TRADE. 


tween the ocean line and the railroad which are parties to the agree¬ 
ment, as regards traffic to and from the Far East. ^¥hen these agree¬ 
ments are considered in conjunction with the agreements and con¬ 
ference arrangements existing among the steamship lines themselves, 
it is apparent that the regular trans-Pacific lines occupy a strongly 
entrenched position from a competitive point of view as compared 
with independent water carriers which have no such steamship con¬ 
ference or railroad connections. 

AGREEMENTS BETWEEN STEAMSHIP LINES AND RAILROADS. 


'Names of contracting steamship lines. 
Pacific Mail Steamship Co. 

Toyo Kisen Kaisha. 

Great Northern Steamship Co. 
Osaka Shosen Kaisha. 

Ocean Steamship Co. 1 

China Mutual Steamship Co. J 
Bank Line. 


Names of contracting railroads. 

Southern Pacific Co. 

Atchison, Topeka & Santa Fe Rail¬ 
way Co. 

Western Pacific Railway Co. 

Great Northern Railway Co. 
Chicago, Milwaukee & St. Paul Rail¬ 
way System. 

Great Northern Railway Co. 
Northern Pacific Railway Co. 
Reports no agreement. 


Agreements Between Railroads and San Francisco Trans-Paci-fl.c 
Lines. 

The two lines operating between San Francisco and the Orient, • 
viz, the Pacific Mail Steamship Co. and the Toyo Kisen Kaisha 
have each entered into traffic arrangements with certain transconti¬ 
nental railroads leading into San Francisco. Briefly abstracted, these 
agreements contain the following conditions: 

1. Agreement between the Toyo Kisen Kaisha and the Western 
Paci-fic Railway Co.^ made on March 1906.^ and to continue in 
force for a period of 10 years .—Aside from the numerous provisions 
having for their purpose the establishment and joint operation of 
a through service between points on the railroad system and Far 
Eastern ports, this agreement stipulates: 

(1) That each of the parties shall exchange traffic at San 
Francisco, each dealing, so far as shall be lawful, exclusively with 
the, other, and that the steamship company and the railway lines of 
the Gould system, shall form and be operated as a through trans¬ 
portation line; and 


AGREEMENTS IN THE AMERICAN-ASIATIC TRADE. 14? 

(2) That the steamship company will turn over to the 
railway company all eastbound traffic controlled by it and originat¬ 
ing in the Orient and destined to any point that can be reached via 
the railway company. The railway company in turn agrees that 
“so far as the same may be lawfully done” it will deliver to the 
steamship company all westbound traffic controlled by it and 
destined to any Oriental or Hawaiian port. 

The aforementioned preference, however, the Toyo Kisen Kaisha 
advised the Committee, is not carried out, “ as the Western Pacific 
Railway Co. now supplies cargo equally to outgoing steamers of the 
Pacific Mail Steamship Co. and the Toyo Kisen Kaisha, and the lat¬ 
ter company furnishes eastbound freight to the Southern Pacific 
Railway Co., and the Atchison, Topeka & Santa Fe Railway Co., 
equally with the Western Pacific Railway Co.” In view of the traffic 
arrangement between the Pacific Mail Steamship Co. and the Toyo 
Kisen Kaisha, relative to the employment of the Judson Freight 
Forwarding Co. as a joint agency for the two lines (already de¬ 
scribed in this section of the report) the latter company and the 
Western Pacific Railway Co. reached an understanding on August 
21, 1911, whereby the Toyo Kisen Kaisha is at liberty to join in 
maintaining during the life of the agreement joint forwarding 
agencies to represent the company and the Pacific Mail in Chicago, 
New York and other traffic centers in the collecting and forwarding 
of through shipments destined to the Orient. By this supplemen¬ 
tary agreement the Western Pacific Railway Co. agrees to impar¬ 
tially afford to both steamship companies the same service, facilities 
and advantages. Provision is also made to the effect that: 

The temporary arrangement now in effect under which cotton arriving over 
the lines of the Western Pacific, Southern Pacific or Santa Fe is forwarded by 
the first sailing after arrival, is to be continued during the period of the arrange¬ 
ment provided hereby, with the further understanding that out-bound freight 
consigned to the Orient from points east of San Francisco over any line may 
be sent forward by the Steamship Company having the first sailing irrespective 
of whether such freight shall have been forwarded by a joint agency of said 
steamship companies. It is understood, however, that this stipulation is not 
intended to and shall not relieve Toyo Kisen Kaisha from its obligations to 
employ all of its own agencies and facilities exclusively for the benefit of the 
Western Pacific-Toyo Kisen Kaisha Route. 

The foregoing arrangement will also involve the operation of steamships of 
Toyo Kisen Kaisha and Pacific Mail Steamship Co. in cooperation under 


148 


AGREEMENTS IN THE AMERICAN-ASIATIC TRADE. 


a joint schedule which will be made up as far as possible in such manner as 
to secure at substantially uniform intervals, six or seven steamships to be 
operated by the Pacific Mail Steamship Co. and four steamships by the Toyo 
Kisen Kaisha. 

2. Agreements entered into^ by the PacifiG Mail Steamship Co .— 
This company has through routing arrangements with the Southern 
Pacific Co. and the Atchison, Topeka & Santa Fe Railway Co. These 
agreements, however, are reported not to provide for an exclusive 
working arrangement between the parties. The Southern Pacific Co. 
reported to the Committee that it exchanged with water carriers 
indiscriminately and on the basis of the local rates of the parties, 
except as regards government shipments to the Philippines via San 
Francisco, which are prorated 60 per cent rail and 40 per cent water. 

The Atchison, Topeka & Santa Fe Railway Co. reported that: 

The only definite understanding which this company has for a division of 
traffic is as follows: We have with the Pacific Mail Steamship Co. a mutual 
understanding for the interchange of traffic according to which the steamship 
line is to deliver this company 25 per cent of the inbound freight traffic from 
the Orient into San Francisco destined to eastern common points of the United 
States; and vice versa, the steamship line agrees to reserve 25 per cent of its 
space allotted to overland freight for Orient traffic delivered them by this 
company. This company has no exclusive working arrangement with any 
water transportation lines. 

Agreements between railroads and north Pacific steamship lines 
belonging to the Trans-Pacific Tariff Bureau. 

Five of the trans-Pacific lines touching North Pacific ports have 
entered into agreements with transcontinental railroad systems. 
Some of these contracts are particularly noteworthy because of their 
bearing on the matter of ocean rates in the Far Eastern trade and 
their references to the trans-Pacific steamship conferences. The fol¬ 
lowing is a brief description of the leading provisions of these 
agreements. 

1. Agreement entered into on December 12^ 1902 {and to remain 
in force until sbn months'^ notice from either side to terminate it is 
given) by Messrs. Alfred Holt & Co.^ Managers of, the Ocean Steam¬ 
ship Go. and the China Mutual Steamship Co. and the Northern 
Pacific Railway Go. and the Great Northern Railway Go .—In its 
replies to the Committee’s Schedule of Inquiries the Northern Pacific 
Railway Co. states that this is the only formal contract now in force 


AGREEMENTS IN THE AMERICAN-ASIATIC TRADE. 149 

J 

between it and a trans-Pacific service. The memorandum of agree¬ 
ment submitted to the Committee contains the following important 
provisions: 

(1) Alfred Holt & Co. declare that their service across 
the Pacific is primarily for the purpose of developing traffic between 
Europe and the Pacific Coast, so that cargo to and from Europe will 
always be their first consideration. 

(2) Alfred Holt & Co. agree to charge nothing less than 
the trans-Pacific Conference rates in force from time to time, or less 
than is charged by the steamers serving the two railroad lines which 
may be loading alongside their boat. Alfred Holt & Co., however, 
may make such rates as they see fit from ports west of Hongkong 
and Manila at which their vessels may call, provided that the rates 
so made shall in no case be lower than the conference rates for sim¬ 
ilar classes of goods from Hongkong. It is also agreed that the 
steamers will call at certain Oriental ports, and that the steamers 
have leave to call at Honolulu and San Francisco. 

(3) Alfred Holt & Co. undertake to give regular four¬ 
weekly sailings for the Pacific Coast and to announce these sailings 
six months in advance; and as far as may be practicable to arrange 
them so that they do not clash with the other sailings of the railways. 

(4) Alfred Holt & Co. undertake to confine their book¬ 
ings of cargo to overland points to cargo from ports west of Hong¬ 
kong and Manila, and not to engage cargo to overland points from 
the Philippine Islands, Hongkong, China or Japan. 

(5) The railways agree to give the steamers of Alfred 
Holt & Co. all overland cargo they can obtain which the railways’ 
existing steamship lines are unable to carry. They also agree that 
the number of vessels employed by their existing steamship lines 
shall not be increased, except under certain conditions, so long as 
Holt & Co.’s four-weekly steamers can accommodate the cargo 
offering. 

(6) Alfred Holt & Co. agree to hold at the disposal of 
the railway companies a certain amount of space on each of their 
trans-Pacific steamers for overland cargo. Moreover, should the 
company desire to carry United States Government cargo between 
the Philippines and the Pacific Coast they agree before doing so to 
confer and agree with Messrs. Frank Waterhouse & Co. (now repre- 


150 AGEEEMENTS IN THE AMERICAN-ASIATIC TRADE. 

senting the Bank Line), as well as the Northern Pacific Railway 
Co’s, existing steamship connection, as to the minimum rates at 
which either shall tender. 

(7) Alfred Holt & Co. undertake to make no alliance 
with any other trans-Continental railway in the United States. 
The railways agree that in the event of their importing material 
from Europe by sea to the Pacific Coast, they will give Holt & Co. 
every opportunity of tendering for its carriage and will give their 
steamers the preference over others at equal rates. 

2. Agreement made April 8, 1908 {effective until March 7, 1919)^ 
between the Osaka Shosen Kaisha and the constituent companies of 
the Chicago^ Milwaukee cfi 8t. Paul Railway System. —This con¬ 
tract was submitted to the Committee by the Chicago, Milwaukee & 
Puget Sound Railway Co. in answer to its Schedule of Inquiries. 
Among its numerous provisions the following have been abstracted 
and call for special notice: 

(1) The contract declares “that it is to the mutual ad¬ 
vantage of the parties hereto that an alliance be formed which will 
permit the free and continuous movement of all traffic over the 
through lines thus formed in competition with other through lines.” 

(2) The Osaka Co. agreed to secure six new steamships 
of a certain tonnage and to maintain two sailings per month from 
ports in Japan and China and from either Seattle or Tacoma, in 
connection with the railway company. Each party stipulates that it 
shall not hereafter become interested, directly or indirectly, in any 
other steamship or railroad line handling via Puget Sound ports, 
or any other port of the United States or Canada on the Pacific Coast, 
any freight business in competition with the line established by this 
contract. 

(3) The Osaka Co. may enter into contracts with other 
companies as regards local freight (i. e., originating at or des¬ 
tined to ports on the Pacific Coast), but it is agreed that, when the 
railway company establishes a connection with such ports, shipments 
shall be delivered to it in preference, provided the railway company’s 
published rates are not higher than those of other lines. Moreover, 
freight tendered to the Osaka Co. by the railway company shall be 
given preference over any other freight tendered to the steamship 
company by any other corporation or shipper. The railway com- 


AGREEMENTS IN THE AMERICAN-ASIATIC TIRADE. 151 

pany is likewise to give the preference to through freight tendered 
by the Osaka Co. over any other freight tendered to the railway com¬ 
pany by any other corporation or shipper. It is further agreed that 
the Osaka Co. will upon eastbound traffic, and the railway company 
will upon westbound traffic, quote substantially the same through 
rates that are quoted upon similar traffic by competing lines via any 
route. Detailed arrangements exist for the division of the earnings 
between the parties upon joint through freight business. 

(4) The Osaka Co. may become a member of the North 
Pacific Line Conference, and shall furnish the railway company with 
a record of the proceedings of such conference as promptly as possible. 

(5) In Japan and China the Osaka Co. shall represent the 
interests of the railway company, and in the United States and 
Canada the railway company shall represent the steamship company. 

3. Agreement between the Nippon Yusen Kaisha and the Great 
Northern Railway Go.^ effective November 1, 1911^ and to continue in 
force for 10 years^ subject to cancellation by either party on 1 year'^s 
written notice, —This agreement—although the parties agree to the 
establishment of a service between designated ports, through routing 
arrangements, mutual assistance in obtaining traffic, and the estab¬ 
lishment of the time and number of sailings between designated 
ports—contains no provisions which openly and definitely declare the 
existence of an exclusive working arrangement between the railroad 
company and the steamship line in the matter of a trans-Pacific 
service. In this respect the wording of this agreement differs from 
the contracts outlined above. 

While the steamship company' declares its intention to maintain 
an efficient fortnightly service between Seattle and Yokohama, Kobe, 
Moji, Shanghai and Hongkong, it is not obliged to cause steamers to 
leave Seattle and Japan oftener than, once each month. But if a 
fortnightly service is not maintained between the designated points, 
the railway company, in ca^e it be found necessary to avoid delay, 
has the right to forward shipments of through cargo and parcels via 
other steamship lines affording direct service between such ports dur¬ 
ing the time that the steamship line fails to maintain a fortnightly 
service. But it is expressly agreed that the railway company shall 
not forward such through cargo or parcels via other lines under 
through bills of lading except in case of extreme necessity. 



152 


AGREEMENTS IN THE AMERICAN-ASIATIC TRADE. 


The steamship company agrees to give the railway company due 
notice of its intention not to make any fortnightly sailing, and vice 
versa, the railway company obligates itself to notify the steamship 
company of its intention to forward cargo via other lines under the 
conditions of the contract. In case the combined steamers of the 
Nippon Yusen Kaisha and the Great Northern Steamship Co. are 
not sufficient to handle the traffic via said ports, the former shall have 
the first right to furnish additional steamers. 

4. Relations 'between other north trans-Paciflc lines and Trans¬ 
continental Railroads, —It should be added that all of the $6,000,000 
capital stock of the Great Northern Steamship Co. is owned by the 
Great Northern Kail way Co. The railway company, in its answers 
to the Committee’s Schedule of Inquiries, states that it has “ a work¬ 
ing arrangement with the steamship line for the interchange of traffic, 
but has no written agreement.” 

The Bank Line advised the Committee under oath that it has not 
entered into any agreement with any American railroad company. 




CHAPTEK VI. 

AGREEMENTS IN THE TRADE BETWEEN THE UNITED STATES 

AND SOUTH AMERICA. 


Classification of Steamship Services. 

A comprehensive understanding of steamship agreements and 
understandings in the trade between the United States and South 
America can be best obtained by grouping the regular line services. 
Eight groups of lines logically suggest themselves, viz., those engaged 
j n the following trades, both southbound and northbound: 

(1) Between New York and central and southern Brazilian ports. 

(2) Between New York and the Amazon district. 

(3) Between New York and New Orleans and the River Plate. 

(4) Between New York and Venezuela and Curacao. 

(5) Between New York and the Caribbean ports of Colombia. 

(6) Between New York and New Orleans and the West Coast of 

South America via Panama. 

( 7 ) Between the Atlantic seaboard of the United States and the 

West Coast of South America via the Straits of Magellan. 

(8) Between the Pacific ports of the United States and the West 

Coast of South America. 

Definite agreements or tacit understandings for the maintenance of 
rates have been admitted by the representatives of the lines engaged 
in each of the above-mentioned trade routes, with the exception of the 
last two. A brief description of all these agreements is furnished by 
the accompanying chart, and a detailed account of the same will fol¬ 
low in the order suggested. Suffice it to say at this point that in the 
trade to and from Venezuela, the Caribbean ports of Colombia, and 
the West Coast of South America via Panama, all of the regular lines 
are operating on the basis of written agreements or oral understand¬ 
ings; while in the case of the Amazon district the traffic to and from 
New York is controlled by a single line. In the trade to and from 
central and southern Brazil all of the lines except one—the subsidized 
Brazilian line—are organized in conference and operate under written 

agreements. The same situation prevails in the American-River 

153 



154 AGREEMENTS IN THE TRADE WITH SOUTH AMERICA. 

Plate trade where all the regular lines, except the Norton Line (which 
recently withdrew from the conference but continues to observe the 
conditions of the other lines just as it did when a member of the con¬ 
ference), are acting under an oral rate understanding. Only in the 
traffic between the West Coast of South America and New York via 
the Straits of Magellan, and in the trade between the Pacific ports of 
South America and the Pacific ports of the United States did the 
line representatives deny the existence of any written or oral rate 
agreements; but, as will be shown later, the several lines in this trade 
observe approximately the same rates. 

Agreements in the American-Brazilian Trade. 

Enumeration of the agreements .—The traffic between the United 
States and Brazil, exclusive of the Amazon district, is handled by 
the Lloyd Braziliero, the Joint Service of the Hamburg-American 
Line and Hamburg-South American Steamship Co., the Lamport & 
Holt Line, and the Prince Line. Of these lines the last three (com¬ 
monly called the Conference Lines) are operating under a written 
agreement which governs the trade with the United States both 
northbound and southbound. The same lines also operate between 
Brazil and European ports, and together with the North German 
Lloyd, and the Eoyal Mail Steam Packet Co. (which recently 
absorbed the Lamport & Holt Line) are working under an agree¬ 
ment which has for its purpose the regulation and control of the 
trade from Brazilian ports “ to or via the ports of Antwerp, Kotter- 
dam, Amsterdam, the Kivers Weser and Elbe, and to ports in the 
United States.”^ The fact that the same lines operate in both the 
American and European trade should be particularly noted because 
of its important bearing upon the control of the direct Brazilian- 
American trade. Later references will show that the European 
Agreement contains provisions which vitally affect the traffic to and 
from New York and which, numerous witnesses have declared, 
constitute insuperable obstacles to the establishment of an inde¬ 
pendent and nonconference line from the United States to Brazil. 

> For a memorandum of the agreement between the Lamport & Holt Line, Prince Line, 
and Joint Service of the Hamburg-American Line and Hamburg-South American Steam¬ 
ship Co., governing the trade from Brazil to the United States and vice versa see vol. 1, 
pp. 435-437. For a memorandum of the European agreement signed by the aforemen¬ 
tioned three lines and the North German Lloyd and the Royal Mail Steam Packet Co., see 
TOl. 1, pp. 16-16, and pp. 84-86. 





* AGREEMENTS AND UNDERSTANDINGS BETWEEN DIRECT LINES * 

% 

* OPERATING BETY/EEN THE UNITED STATES AND SOUTH AMERICA. * 

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ROYAL DUTCH WEST INDIA MAIL LINE 


ROYAL MAIL STEAM PACKET COMPANY 



PANAMA RAILROAD STEAMSHIP COMPANY 


BOOTH STEAMSHIP COMPANY 


HAMBURG-AMERICAN LINE 
and 

HAMBURG-SOUTH AMERICAN STEAMSHIP LINE 
(Joint servloe) 






PRINCE LINE 






VENEZUELA and CURACAO 

(A differential rate understanding respect¬ 
ing trade between New York and Curacao, and 
ports of Venezuela.) 


NEW YORK-WEST COAST OF SOUTH AMERICA ROUTE 

VIA PANAMA 

(Verbal understanding as to through rates 
charged in both directions via connecting 
lines at Panama. The understanding also 
covers the United Fruit Company’s servide 
to and from New Orleans via Panama.') 



NEW YORK-AMAZON DISTRICT 

(Tacit tinder standing between the Booth 
Steamship Company, serving the Amazon dis¬ 
trict and adjacent territoiy, and the 
Brazilian Conference lines, operating to 
ports south of the Amazon district, to 
respect each other's territory.^ 


EUROPEAN AGREEMENT 

(Governs both the Brazil-Burope trade and 
the Brazil-United States trade. Specifies 
the minimum and maximum rates from Brazil 
to the United States. Also defines the 
deferred rebate system prevailing in both 
the Brazil-Europe and Brazil-United States 
trade. The North German Lloyd and Royal 
Mall Steam Packet Co. are also signatories 
to this agreement.'i 


AGREEMENT OP 1908 
(AMERICAN AGREEMENT) 

(Specifies number of sailings of each line, 
bow outward and homeward. Also provides 
for (1) the fixing and maintenance of rates; 
and (2) a deferred rebate system similar 
to thai; in the Brazil-Europe trade.) 


J 


BARBER LINE 

j 


TACIT UNDERSTANDING 

between the River Plate Conference lines 
and the Brazilian Conference lines to re¬ 
spect each other's territory. 



HOUSTON LINE 


NEW YORK-RIVER PLATE AGREEMENT SOUTHBOUND 
(An oral tinder standing between the indicated 


r 


NEW YORK-COLOMBIAN TRAFFIC 
(The first two lines have written pool¬ 
ing and rate agreements with each other, 
covering both passenger and freight 
business in both directions. Deferred 
rebates allowed on both voyages, and 
shipments via United Fruit Co. do not 
violate the rebate agreement. 

The United Fruit Co. is not a 
signatory to above agreements: but by 
tacit understanding charges the same 
rates and works under the same condit¬ 
ions, except that it is not a party to 
the pooling agreement.) 




NEW YORK-COLON TRAFFIC. (The agree¬ 
ments mentiozled in connection with the 
New-York-Colomblan traffic embrace the 
entire Central American and West Indli 
traffic of the lines. With referenci 
to the New York-Colon traffic in both 
directions the terms^pf the agreements 
are similar- except that there is no 
deferred rebate system. The relatl 
of the United Fruit Company to the 
other two lines is also the same as 
described for the New York-Colomblan 
traffic.) 


an 

e 


Lon 


r 


LONDON CONFERENCE 

(Arrasages the schedule of sailings be* 
tween the United States smd Brazil, 
both outward and homeward, and deter¬ 
mines the order in which the boats 
load. It also possesses the rate- 
making authority.) 


V 


HEW YORK CONFERENCE 
(Weekly meetings of line represent¬ 
atives to advise each other as to the 

f tearners berthed, quantity of cargo 
ooked, frelmt oodtraots made, ana the 

f eneral conditions of the freight msmr- 
et. It has no discretionary powers 
as regards the schedule of s«d lings 
and the fixing of rates.) 


RIVER PLATE-NEW YORK AGREEMENT 
NORTHBOUND 

(Rates are made in common and deferred 
rebates are allowed to shippers.) 


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AGREEMENTS IN THE TRADE WITH SOUTH AMERICA. 155 

The agreement for the regulation of the trade between the United 
States and Brazilian ports, and vice versa, was concluded on Feb¬ 
ruary 14, 1908,^ while the memorandum of agreement governing the 
trade between Brazil and leading European ports, and vice versa, as 
submitted to the Committee, is dated 1909. Although steamship 
agreements governed the trade prior to these dates, it appears that, 
owing to a change of ownership of one of the lines in 1907, all these 
agreements were abrogated. A rate war ensued with the result that 
all of the lines lost heavily. Following this rate war the principals 
of the lines met in February, 1908, and signed a treaty of peace, 
adopting the foregoing agreements which restored conditions to 
approximate!}^ what they were prior to 1907. The essential provi¬ 
sions of these agreements, hereinafter called the American and 
European Agreements respectively, and the leading practices of the 
conference lines as regards the Brazilian trade and their effect upon 
American commerce, may be briefly summarized under the following 
heads: 

Provisions of the Agreements .—The following stipulations may be 
summarized under this heading: 

(1) According to the American Agreement the departures 
of the several lines from New York, unless otherwise mutually 
agreed, shall be as follows: The Lamport & Holt Line, 24 sailings 
per annum; the Prince Line, 24 sailings per annum; and the Joint 
Service of the two Hamburg lines, 24 sailings per annum. An 
itinerary covering the requirements of the various ports is to be 
agreed upon with a view to avoiding any excess of tonnage for any 
particular destination. In the traffic from Brazil to the United 
States, the Hamburg lines are limited to 24 sailings per annum, and 
the Prince Line to 24 sailings to New York and 12 to New Orleans. 
The Lamport & Holt Line, however, is free to despatch as many 
steamers in this trade as may suit its convenience. Moreover, the 
Hamburg lines agree to withdraw their service to New Orleans, 
sailings to that port to be maintained only by the steamers of the 
Lamport & Holt and Prince Lines. 

iln his replies to the Committee’s Schedule of Inquiries under date of January 24, 
1913, Mr. James Knott, Managing Director of the Prince Line, states that the agreement 
of February 14, 1908, Is in force to-day and covers the traffic between the United States 
and Brazil both outward and homeward. Messrs. Lorenzo Daniels and Paul Gerhard, New 
York representatives of the Lamport & Holt Line and the Prince Line, respectively, have 
testified to the same effect. (Vol. 1, pp. 157, 2.38.) 




156 AGREEMENTS IN THE TRADE WITH SOUTH AMERICA. 

(2) In the southbound traffic the American Agreement 
provides for the drawing up of a tariff of rates, “ to be strictly ad¬ 
hered to without any modification whatever except as they may be 
altered by agreement in meeting or in writing.” Northbound, the 
rates of freight on coffee (Sec. 5, of the American Agreement) are 
to be “ fixed in conference at the highest possible level, no alteration 
to be made therefrom except by mutual agreement.” Rates on all 
other articles, excepting sugar, from the northern ports of Brazil, 
are also to be agreed upon and adhered to, and all rebates or dis¬ 
counts to shippers, except the deferred rebates to be mentioned later, 
are prohibited. Sections 2 to 6, inclusive, of the European agree¬ 
ment also have an important bearing on rates in the American traffic, 
and stipulate the following: 

2. That the freight to Europe shall not be more than 5 shillings and 5 per 
cent primage per ton in excess of that for which coffee can be shipped and 
actually received at the time in question by outside steamers, with a minimum 
rate of 20 shillings and 5 per cent primage. 

3. That the rate to the United States shall not be more than 10 cents 
and 5 per cent primage per bag in excess of that at which coffee can be 
shipped and actually received at the time in question by outside steamers, with 
a minimum rate of 30 cents and 5 per cent primage. 

4. That no exporter shall be allowed more favorable conditions than another. 

5. That 14 days’ notice will be given of any increase in the rate of freight, 
and the tonnage required by the shippers will be supplied at the lower rate 
at the time notice is given to the extent of tonnage available by the ships of 
the Lines loading within 14 days from the date of notice. 

6. In case the Lines fail to supply the available tonnage required at the 
above rates of freight by their own or chartered steamers within a reasonable 
time, say, 14 days from the date of request, or if their current rate be not in 
accordance with what is stipulated in clauses 2 and 3 of this agreement, the 
Shippers shall be at liberty to charter or ship in an outside vessel or vessels, 
or a part or parts thereof, without prejudice to their right to rebate under 
this agreement. In case of the shippers deciding to charter outside tonnage 
upon the grounds that the rate of freight charged by the Lines be at any 
particular time more than 5 shillings and 5 per cent per ton and 10 cents and 
5 per cent per bag, respectively, in excess of the rates of freight at which 
coffee could be shipped in quantity at the time in question by outside steamers, 
then the shippers shall produce to the agents of the Lines in Brazil, at the 
time of such outside chartering, evidence as to the latter rate of freight. It 
is understood and agreed that the shipper will not offer, directly or indirectly, 
any chartered tonnage of theirs to other shippers at a lower rate of freight 
than their own charter rate. 


AGREEMENTS IN THE TRADE WITH SOUTH AMERICA. 157 

(3) It is interesting to note that the American Agree¬ 
ment provides with reference to the voyage from New York that 
“ consideration shall be given to the establishment of a deferred 
rebate system on the same lines as that in force from Europe.” 
(Section 3.) Such consideration apparently led to a determination 
not to adopt the system, because no deferred rebates are allowed on 
goods shipped from American ports to Brazil, although they apply 
in the northbound voyage to the United States, as well as to both 
outward and homeward shipments between Europe and Brazil. In 
the northbound trade to New York, the American Agreement pro¬ 
vides for the establishment of a rebate system on the same scale as 
that in force for Hamburg, “ under which all shippers will be re¬ 
quired to confine their shipments either to the United States or to 
Antwerp, Rotterdam, Amsterdam, Hamburg and Bremen, to the 
steamers of the parties to this agreement or to other lines which may 
be in conference with the Hamburg Lines in their Brazil-Europe 
service.” Further provision is made to the effect that an agreement, 
if possible, shall be concluded with the Royal Mail Steam Packet Co., 
the Chargeurs Rounis, or other lines, under which shipments to 
Havre and London may be brought within the same rebate system. 

The rebate system to which the American Agreement makes 

reference is outlined in Section 1 of the European Agreement. A 

• 

10 per cent deferred rebate is promised to shippers by the Combined 
Lines on shipments of coffee from Santos, Rio de Janeiro, and 
Victoria by their steamers to Antwerp, Amsterdam, Rotterdam, 
the Rivers Weser and Elbe, Copenhagen, and the ports of the United 
States, These rebates are to be computed every 12 months up to a 
certain date and to be paid 3 months thereafter, but only on the 
condition that the shippers have confined all their shipments to the 
above mentioned European and American ports^ and to the steamers 
of the combined lines. The rebate agreement expressly states that 
the rebates are paid only on the condition that the shipper “ employ 
exclusively the steamers of the Combined Lines ” for their shipments 
of coffee to or via the named ports of Europe, ar^d to ports in the 
United States, Failure to observe the agreement in either the Euro¬ 
pean or American traffic will involve a forfeiture of all the rebates 
which may have accumulated to the shipper’s credit on shipments 
in both trades. 


158 AGKEEMENTS IN THE TKADE WITH SOUTH AMERICA. 

Section 7 of the European Agreement states that: “ Until further 
notice any shipments by steamers of the National Brazilian Line, 
under the Brazilian flag, to the United States, and of the Koninklijke 
Hollandsche Lloyd to Amsterdam, at not under the rates of freight 
and conditions of the Lines, will not prejudice the Shippers’ claims 
to rebate.” This provision was adopted, owing to threatened legisla¬ 
tion by the Brazilian Government in 1910, with a view to preventing 
the payment of deferred rebates. Brazilian shippers, however, the 
Committee is advised, did not avail themselves of this offer, and the 
National Brazilian Line (Lloyd Braziliero), as will be explained 
later, has been prevented by the operation of the rebate system from 
securing any considerable portion of the coffee shipments. 

(4) In case any of the signatories to the American Agree¬ 
ment begin a service in which they have not already been engaged 
previously, and which is in competition with any trade in which any 
of the other signatories are at present engaged, any such party 
whose trade is interfered with shall have the right to withdraw from 
the agreement. 

(5) All matters of dispute between the lines shall, accord¬ 
ing to the terms of both agreements, be referred to arbitration in 
London under the terms of the Arbitration Act of 1889, and the 
decision of the arbitrators or umpire shall be final and binding upon 
all the parties to the agreement. 

(G) Section 6 of the American Agreement makes ref¬ 
erence to a supplementary pooling agreement then pending. This 
agreement was entered into by the three New York lines on July 8, 
1908, for the purpose, as stated in the agreement (vol. 1, p. 166), 
“ of equalizing the benefits and disadvantages in connection with the 
berth trade from the United States to central Brazilian ports.” Each 
of the services had a one-third interest in the pool. Agents’ com¬ 
missions in New York, fixed at 5 per cent of the net freight earned, 
were also placed in a pool for division amongst them in equal propor¬ 
tions, i. e., one-third to the agents of each service. The pooling 
arrangement was based upon a minimum of one sailing per month 
for each party, but each line was free to increase its sailings to two 
per month, without, however, increasing its share in the pool. This 
pooling agreement was terminated on June 30, 1909, and at present 
there is no pooling arrangement between the lines, each line taking 
its own earnings. (Vol. 1, p. 198.) 


AGREEMENTS IN THE TRADE WITH SOUTH AMERICA. 159 
> 

Conferences governing the trade .—The signatories to the aforemen¬ 
tioned American Agreement are organized in two conferences, viz., 
the London Conference and the New York Conference, and in each 
of these cities maintain for joint account a conference office with a 
secretary. The New York Conference office is located at 326 Produce 
Exchange, and meetings are held by the line representatives once a 
week for the purpose of advising each other as to the steamers 
berthed, quantity of cargo booked, freight contracts made, and the 
general conditions of the freight market. Testimony of the New 
York representatives of the lines shows that this conference exists 
principally for the purpose of carrying out the orders of the London 
Conference to the greatest advantage. Its chief purpose (vol. 1, pp. 
175, 231) is to enable the representatives of the lines to advise each 
other with a view to avoiding needless waste in the operation of the 
service, especially by arranging the schedule of steamers to meet the 
requirements of the trade and existing contract obligations in such a 
manner as to prevent the sending of two steamers to the same port at 
the same time, when one steamer can perform the service equally well. 
As one witness stated, the conference enables the lines “to pull to¬ 
gether and saves the waste of pulling against each other.” In case a 
very limited joint cargo, or a too bulky cargo for the account of a 
single line, should happen to be scheduled for the same port in the 
same week, one line or all of them cable to their London principals, 
asking that either one of the steamers be relieved from the necessity of 
calling at that port or that another steamer be dispatched, depending 
upon the requirements at the time. In case of a very limited joint 
cargo one steamer may be able to perform the service efficiently, and 
by having that steamer take over the cargo of the second steamer the 
steamship interests effect a great saving in the cost of operation with¬ 
out in any way jeopardizing the best interest of the shipper. 

All discretionary powers, however, seem to rest with the London 
Conference, which is composed of the owners of the lines. Orders as 
to rates and other important matters are regularly cabled by the 
London Secretary to the New York Conference Secretary. In the 
first place the London Conference regulates the departures of steam¬ 
ers, and designates the boats that are to load. In this respect it is 
the policy at present to keep the cargo boat schedule arranged in such 


160 AGREEMENTS IN THE TRADE WITH SOUTH AMERICA. 

a manner as to establish a regular and proper interval between sail¬ 
ings for the convenience of the trade. (Vol. 1, p. 175.) Secondly, 
the London Conference exercises the rate-making authority. Some 
years ago, the New York representatives of the lines were at liberty 
to fix and change rates (but not below the agreed minimum) on a 
certain number of staples, such as lumber, resin, flour and kerosene. 
But in recent years, as explained by Mr. Gerhard (vol. 1, p. 239) the 
New York representatives have been deprived of that authority and 
at present receive their orders from London. He further testified: 
“We cable through our Secretary in New York to the Secretary in 
London, who, I presume, submits the matter to the different owners, 
and we receive a reply through the Secretary as to what we should do 
in the matter of rates.” 

Contracts with shippers. —Freight contracts which are made for a 
specific sailing, or for a period not exceeding three months, are made 
by each line for its own steamers and on its own responsibility. But 
all contracts which extend beyond three months, or which involve a 
very large volume of freight, are usually joint contracts, i. e., made 
by one line on behalf of all the lines, each line assuming a one-third 
liability. Contracts involving large amounts of staples are also made 
jointly with a one-third liability for each line. (Vol. 1, pp. 155, 206.) 
It is only in connection with the joint contracts, the Committee is 
advised, that the lines distribute the traffic in New York. 

A large number of joint contracts have been entered into by the 
several lines with such corporations as the Baldwin Locomotive 
Works, the Singer Sewing Machine Co., the United States Steel 
Corporation, the Barber Asphalt Paving Co., etc., and sample copies 
have been submitted to the Committee. (See vol. 1, pp. 247 and 
following.) Each line making the contract does so on behalf of all 
the lines, and the agreement covers the transportation of the shippers’ 
entire shipments of merchandise from New York to the designated 
ports in Brazil at rates and conditions prescribed in the contract. 
In return for the shippers’ entire freight, the steamship companies 
obligate themselves to provide space on receipt of ample notice of 
the shippers’ requirements. 

The use of deferred rebates in the trade northbound. —As alreadv 
explained in connection with the American and European Agree¬ 
ments, the conference lines allow shippers a deferred rebate of 10 


AGfEEEMEKTS IN THE TRADE WITH SOUTH AMERICA. 161 

per cent on coffee, if shipped exclusively by the syndicate lines to the 
ports of Antwerp, Amsterdam, Rotterdam, the rivers Weser and 
Elbe, and to ports in the United States. But shippers are privileged 
to ship by chartered vessels without jeopardizing their accumulated 
rebates, in. case the charter rate is 10 cents per bag below the rate 
charged by the syndicate lines. (Vol. 1, p. 62.) Mr. Joseph Purcell, 
representing the firm of Hard, Rand & Co., testified that the confer¬ 
ence lines can not charge more than 10 cents above the prevailing 
ocean charter rate, and that when the syndicate lines advanced their 
rates in October of 1912, his firm entered the market to charter a ves¬ 
sel, but discovered that this could not be done at a rate sufficiently 
low to give them the advantage of this stipulation in the agreement. 
(Vol. 1, p. 62.) 

Until recently the deferred rebate allowance was graded accord¬ 
ing to the quantity shipped, ranging from 5 per cent for ship¬ 
ments up to 100,000 bags, and one-quarter per cent more for every ad¬ 
ditional 10,000 bags, up to a maximum of 10 per cent for 300,000 bags 
or over. (Vol. 3, p. 222.) This discriminatory feature, however, 
was subsequently eliminated, and the present arrangement gives the 
same rebate on all shipments, large or small, and is regarded by 
shippers as much more satisfactory than the former plan of dis¬ 
criminating between large and small shippers. (Vol. 3, p. 220.) All 
rebate agreements are made by the syndicate lines with the agents of 
American coffee houses in Brazil instead of with the head offices in 
the United States. In this connection it is also significant that no 
deferred rebates are allowed in the trade southbound from New 
York, especially in view of the fact that (1) the matter had been 
taken under consideration by the lines, and (2) such rebates are 
allowed, not only in the trade to New York, but in both the outward 
and homeward voyages of the Brazil-Europe trade. The Committee 
is also advised by the American Consul General at Rio de Janeiro 
that “coffee shippers at that port state that written agreements, 
formerly made between them and the conference lines, have been 
withdrawn, and only verbal agreements are now made.” 

Arguments in favor of the deferred rehate system ,—Representa¬ 
tives of the conference lines testified before the Committee that the 
aforementioned rebate system serves as a protection to both shipper 
and shipowner in that it is to the interest of the shipper that the 
25655*— VOL 4—14-11 



162 AGREEMENTS IN THE TRADE WITH SOUTH AMERICA, 

steamship lines should be placed in a position where regular and 
efficient service can be given. To build up and maintain such a 
service, it was claimed, requires an agreement on the part of the 
shipper to support the lines offering him a regular and up-to-date 
service with his entire shipments throughout the year. In fact, the 
steamship-line representatives have emphasized the view that the 
deferred rebate system in no way represents a discrimination be¬ 
tween shippers; that it is simply a legitimate “ discount ” or “ com¬ 
pensation ” to the shipper for exclusive support, and open to all 
shippers who are willing to give such support; and that it is unfair 
for shippers to insist on a quick and regular service with stable rates 
at all times, irrespective of the fluctuations in the volume of freight 
offerings, and yet be free to withdraw their support (which alone 
makes the efficient service possible) and give it to an outsider when¬ 
ever it suits their convenience. The injustice of this is especially 
true, it is claimed, because of the small volume of freight moving 
northward to New York. Mr. Paul Gottheil testified that the cargo 
records of the last 16 sailings of the Hamburg lines northbound 
show that only two vessels had obtained a full cargo, only one other 
vessel had secured as much as a half cargo, while some vessels brought 
no coffee at all. (Vol. 1, p. 308.) The Prince and Lamport & Holt 
Lines also submitted detailed records of northbound cargoes to the 
Committee, which show that during the three years 1910-1912 the 
Prince Line steamers averaged only between one-third and one-half 
of full cargoes, and that during 1912 the Lamport & Holt Line steamers 
arri^fing in New York averaged only 40 per cent of their estimated 
coffee-carrying capacity. (Vol, 1, pp. 571, 976.) These figures were 
presented to confirm the assertion that there is not sufficient cargo 
moving northward to provide anything like full cargoes for the 
return voyage of the ships that are necessary to meet the requirements 
of the southbound service. Without the restraining influence of 
the rebate system upon shippers, the volume of northbound cargo 
carried by the regular lines would in all probability be even smaller 
than at present, and it is therefore argued that the lines are justified 
in attempting to hold to themselves the limited amount of freight 
now moving northward by offering the shippers a “ compensation ” 
for their loyal support. 

In the main the important coffee firms do not appear to oppose 
the deferred rebate system. Mr. Julius G. Lay, Consul General 


AGREEMENTS IN THE TRADE WITH SOUTH AMERICA. 163 

at Rio de Janeiro, reports that “ shippers prefer the present rebate 
system, stable freight rates, regular sailings, and good service in 
other respects, to the reverse conditions that obtained before the 
rebate system was inaugurated, and many of them believe that if 
open competition among steamship companies was made possible 
by suppression of rebates, the former unsatisfactory conditions 
would return.” (Vol. 3, p. 220.) Mr. Purcell, of the firm of Hard, 
Rand & Co., whose deferred rebates received from the Lamport & 
Holt Line in the course of a year have amounted to as-much as 
$100,000 (vol. 1, p. 41), explained that his finn must have regularity 
of shipments and efficient service, because its coffee is sold several 
months ahead to parties in the interior of the United States, and 
when making these sales for future delivery his firm must know 
that the requisite amount of tonnage can be secured. The emphasis 
which this firm places upon the quality of the service is indicated 
by Mr. Purcell’s testimony relative to the reasons why he did not 
patronize the Lloyd Braziliero when its rate was only 26 cents per 
bag as compared with 50 cents by the syndicate lines. He insisted 
that the rate of freight (vol 1, pp. 62-64) and the deferred rebate 
allowance are not the only factors in the coffee trade, but that regu¬ 
larity of sailings and a proper supply of tonnage when needed are 
absolutely essential, and that the firm is willing to pay the price 
for the right kind of service. Briefly summarized his testimony is 
to the following effect: “We are compelled to ship coffee from three 
ports—Santos, Rio, and Victoria—and the syndicate lines give us the 
service from these ports when we need it. * * * They have the 

tonnage we want and when we need it, while the Lloyd Braziliero 
has not the service of the other lines. * * * We stick to the syn¬ 

dicate lines, because they give us the service we want, and we must 
have that service. * * * We are assured as long as we do busi¬ 

ness with the syndicate lines that we will have the tonnage, and we 
do not have to pay more than 10 cents a bag above what we can 
charter for.” 

Effectiveness of the deferred ret ate system against nonconference 
lines .—Considered from the standpoint of its effect upon noncon¬ 
ference lines, the deferred rebate system in the Brazilian trade would 
seem to constitute an almost insuperable obstacle to the successful 
entrance into the trade of any independent regular line which does 


164 AGREEMENTS IN THE TRADE WITH SOUTH AMERICA. 

i 

not possess the most powerful financial backing or the good will of 
the conference lines. The experience of the Mississippi Valley, 
South America & Orient S. S. Co. (Pan American Mail Line) 
and the Lloyd Braziliero, as related to the Committee, would 
seem to warrant this conclusion. The first line began its service 
between New Orleans and South America in 1912 with chartered 
vessels. Although it is claimed by representatives of the conference 
lines that this venture was bound to be a failure from the start, 
owing to the inexperience of the promoters and the excessive charter 
rates paid, it appears from the testimony that, although the vessels 
of the line were loaded to full capacity on the southbound voyage, 
“ not a pound of cargo could be secured for the return trip.” (Yol. 
1, p. 5.) Without northbound cargoes the proposition could not be 
made a paying one, unless aided by a government subvention as in 
the case of the Lloyd Braziliero, and the line was therefore aban¬ 
doned after the first few sailings. 

The failure to obtain any return cargo at all was attributed by 
Messrs. Sidney Story and William Lowry, representatives of the 
line, to the operation of the deferred rebate system. Although the 
line offered inducements in the form of cut rates, shippers refused to 
give their freight and gave as a reason their absolute dependence 
upon the conference lines for the handling of their cargoes, not only 
to the United States but also to Europe. (Vol. 1, p. 24.) Not only 
did the shippers wish not to lose the rebates that had accumulated, 
by patronizing the Pan American Mail Line (and as already ex¬ 
plained, the giving of any freight to an opposition line meant not 
only the loss of rebates in the trade to the United States but also 
in the trade to Europe), but they were possessed with the fear that 
if they used the Pan American Mail Line’s steamers the syndicate 
lines would, on one pretext or another, retaliate by refusing them 
accommodations on their subsequent shipments both in the American 
and European trade. (Yol. 1, p. 87.) 

In this connection it should be borne in mind that nearly every 
shipper of any importance in Brazil has connections in Europe as 
well as in the United States, the European interests in many instances 
being the most important. For this reason neither the Pan American 
Mail Line nor the Lloyd Braziliero could relieve the shippers from 
their dependence on the conference lines (which control both the 
American and European service) by guaranteeing to carry all their 


AGREEMENTS IN THE TRADE WITH SOUTH AMERICA. 165 

cargoes, unless they also established a European service. (Vol. 1, 
p. 45.) But even assuming that the independent line would under¬ 
take to establish a European service, it would still be greatly handi¬ 
capped (1) by the difficulty of a single line giving its patrons suffi¬ 
ciently frequent and regular sailings as compared with the large con¬ 
ference lines which alternate their sailings to meet the requirements of 
the trade, and thus cooperatively accomplish in the way of frequency 
and regularity of service what no ordinary single line can hope to 
do; and (2) by the inducements afforded to shippers to remain loyal 
to the old established lines by the 10 per cent deferred rebate system 
prevailing in both the American and European trades. In fact, Mr. 
Lowry expressed the view that, because the same shippers and con¬ 
ference lines are interested in both the American and European 
branches of the coffee trade, the latter could control the traffic to the 
United States even though rebates were prohibited by law. To quote 
his testimony: “ I do not see how we are going to prevent rebates in 
the voyage to Europe, and if to-morrow the conference lines find it 
impossible to pay rebates on coffee coming to the United States they 
are in a position to say to Mr. Purcell, for example, ‘ Mr. Purcell, 
we are very sorry that we can not pay you any rebates on the 350,000 
bags you shipped to the United States this year, but instead of pay¬ 
ing you 10 cents a bag on what you shipped to Europe we are willing 
to pay you 20 cents just as long as you do not ship outside the com¬ 
bination.’ ” (Vol. 1, pp. 87-88.) Moreover, the representatives of 
the Pan American Mail Line charged that the opposition lines not 
only threatened shippers with the loss of their rebates in both the 
American and European trades, but let it be known that they would 
refuse to accept any longer the cargoes of disloyal shippers and would 
also start an opposition service with a view to running the American 
line out of the trade. (Vol. 1, p. 19.) 

The Lloyd Braziliero’s experience was similar to that of the Pan 
American Mail Line, although the line has managed to continue 
owing to the strong financial backing of the Brazilian Government. 
Although during 1912 this line loaded 22 steamers to practically their 
full capacity with merchandise from New York to Brazil, its return 
cargo did not exceed 6 per cent of capacity, and this showing despite 
the fact that its rates on coffee ranged from 26 cents to 32 cents per 
bag as compared with conference-line rates of 45 cents to 50 cents. 
(Vol. 1, p. 43.) Mr. Joseph J. Slechta, New York agent of the line, 


166 AGREEMENTS IN THE TRADE WITH SOUTH AMERICA. 

estimated that the Lloyd Braziliero has lost fully $2,000,000 in the 
six years it has operated in the trade (vol. 1, p. 40), but stated that 
the business as a whole, both northward and southward, would be 
profitable, and in fact present rates could be reduced, if the line were 
able to obtain a fair proportion of the existing cargo on the upward 
run (vol. 1, p. 49). He further testified that, with the unimportant 
exception of 6,000 bags shipped by F. J. Weston & Co., the line has 
served only one shipper of coffee, viz, Arbuckle Bros., who only ship 
by the Lloyd Braziliero when it serves their purpose to do so. (Vol. 
1, p. 46). In other words, judging from this statement, it would 
appear that every shipper of coffee from Brazil to the United States, 
with the exception of one, is, as far as regular-line service is con¬ 
cerned, shipping by the conference lines. 

Like the representatives of the Pan American Mail Line, Mr. 
Slechta attributes his failure to obtain a return cargo principally to 
the deferred rebate system, which according to his testimony seems 
to operate against other articles (besides coffee) shipped by noncon¬ 
ference lines, such as cocoa and hides. (Vol. 1, p. 46.) In fact, he 
expressed the opinion that, with the deferred rebate system in exist¬ 
ence, no independent line could possibly get a foothold in the coffee 
business, unless like the Lloyd Braziliero it has the backing of the 
government (vol. 1, pp. 48, 49), and that shippers are not in a posi¬ 
tion to take advantage of the lower rates offered by nonconference 
lines. He also admitted .that his line could not relieve shippers of 
their dependence on the conference lines by guaranteeing to carry 
all their coffee to America, unless it also established a European serv¬ 
ice, and that the shippers having interests in both the United States 
and Europe acknowledged that this was a reason why they did not 
patronize his line. (Vol. 1, p. 45.) 

The difficulties encountered by nonconference lines in attempting 
to hold the trade of their clients are further illustrated by the handi¬ 
caps under which shippers operate when they have incurred the dis¬ 
pleasure of the conference lines. These handicaps are explained in 
detail by Arbuckle Bros., the only important coffee firm which does 
not patronize the conference lines, in their statement submitted to the 
Committee on Kules in its Hearings on House Joint Eesolution No. 
72, under date of December 18,1911 (p. 38 and following), and subse¬ 
quently confirmed to the Committee on the Merchant Marine and 


AGREEMENTS IN THE TRADE WITH SOUTH AMERICA. 167 

Fisheries. Briefly summarized this statement shows that Arbuckle 
Bros, encountered the following difficulties: 

(1) Having refused to enter into the rebate agreement, 
the syndicate lines refused entirely to carry their coffee, even at full 
syndicate rates. Numerous shipments have been tendered to the syn¬ 
dicate lines, in accordance with the advertisements of the lines, but 
all have been declined on various pleas. In one instance at least, 
information was furnished to the effect that the Arbuckle business 
could be accepted only if the firm agreed to leave the Lloyd Braziliero 
entirely. 

(2) The Lloyd Braziliero does not refuse to take the busi¬ 
ness of Arbuckle Bros, but its sailings are infrequent and its service 
unsatisfactory in other ways. Since the syndicate lines refuse to take 
the business, the firm is obliged (saving its business via the Lloyd 
Braziliero) to charter vessels and dispatch them to Bio or Santos. 
Such chartering of vessels means that Arbuckle Bros, do not have 
the advantage of the frequent and fast sailings of the syndicate 
lines, and that the firm must first accumulate at the Brazilian ports 
a stock of coffee sufficiently large to warrant the chartering of an 
entire vessel. Their trade is therefore greatly delayed. 

(3) This delay is characterized as “ a distressing handicap, 
particularly in the cost-and-freight business, because buyers on that 
basis must be promised at least an approximate sailing date, and 
Arbuckle Bros, can not tell in advance at what date they will be 
having another vessel under charter.” For the year 1910 the firm 
did a cost-and-freight business of only about 150,000 bags, and this 
business, it is estimated, would have been 500,000 bags if they had 
not been denied the shipping facilities of the syndicate lines. It is 
further estimated that the loss of profits entailed on this class of 
business, owing to the refusal of the lines to carry the business, 
amounted in 1910 to over $122,000. 

(4) On cost-and-freight transactions the buyer pays the 
full freight rate, and the deferred rebate goes to the seller, who in 
this way receives an extra profit, which Arbuckle Bros, do not obtain. 
This factor is regarded an important element of competition operat¬ 
ing to the disadvantage of the firm. 

(5) The firm has customers located in territory tributary 
to the port of New Orleans and the cost of the voyage is materially 


168 AGEEEMENTS IN THE TEADE WITH SOUTH AMEEICA. 

increased if the chartered vessel is required, on its way to New York, 
to call at New Orleans, and the firm does not possess enough New 
Orleans business to warrant chartering a vessel for that port only. 
On a single steamer destined to New York with a cargo of 70,000 
bags, a divergence to New Orleans for the purpose of leaving 8,000 
bags, which had been sold to Western customers and required routing 
via New Orleans, involved a loss of $2,480. 

(6) Very frequently small lots of coffee are needed at 
short notice to supply calls of the trade and this demand the firm is 
unable to meet “ because it can not offer as prompt shipments as the 
other dealers, who are not under the ban of the syndicate.” 

Policy of keeping rates from the United States on a parity with 
those from Europe, —Judging from the numerous complaints re¬ 
ceived by the Committee (which will be discussed fully in the section 
dealing with complaints), the impression is widespread among Amer¬ 
ican exporters that European shippers to Brazil are receiving more 
favorable rates than are granted to their American competitors. 
Such discrimination between the two markets, however, the repre¬ 
sentatives of the lines have absolutely denied in their sworn testimony 
before the Committee. They contend that their New York tariff is 
made up under instructions from London to conform to the English 
and continental tariffs for similar classes of goods, and that the New 
York Conference lines charge the same rates to American shippers 
as are paid by shippers from Europe. (Vol. 1, p. 165.) The Lloyd 
Braziliero follows the rates of the conference lines in the southbound 
trade and cuts them just sufficiently to receive a fair share of the 
cargo. (Vol. 1, p. 40.) 

Mr. Lorenzo Daniels, in speaking for the Lamport & Holt Line, 
testified: “ The policy of the line has been to maintain the same rates 
from the United States to Brazil as are charged from European 
points, and the line has committed itself to a great many of the large 
influential merchants to follow that policy for a great many years, 
and it has followed this practice faithfully.” (Vol. 1, p. 191.) The 
rapid growth of American exports to Brazil, as compared with 
European exports, despite the fact that by far most of the invest¬ 
ments of capital in the railroads and industries of Brazil are 
European and not American, is pointed to as showing that there is no 
discrimination in rates against the United States. In fact, it is ar- 


AGREEMENTS IN THE TRADE WITH SOUTH AMERICA. 169 

gued that many of the American merchants and commission houses, 
having branches in both the United States and Europe, have always 
insisted that the New York lines maintain rates from the United 
States on a parity with those from Europe. In this connection Mr. 
Daniels stated (vol. 1, p. 191) : 

A good many of ttie merchants, in fact, all of the merchants, have European 
houses. ♦ ♦ ♦ When a large contract comes into the market the New York 

firm knows exactly what competition it must meet in Europe, and to secure the 
business from America we give the firm the same rate from America as the 
lines will give from England or Germany; and we do that with our large com¬ 
mission merchants, all of whom have houses abroad. * ♦ ♦ They all know 

perfectly well the conditions of the business; they know exactly the state of 
their competition; and they come to us and say they desire American business 
to go from New York; and the only way they can do that is for us to give them 
equal terms of freight for the same haulage, and we have done this for many 
years. 

Understanding Between the Booth Line and the Three Conference Lines 

Operating to and from Southern Brazil. 

About a year ago, according to the testimony of Mr. Joseph J. 
Slechta, its New York agent, the Lloyd Braziliero withdrew from 
the Amazon district, thus giving the trade of this section to the 
Booth Line exclusively. (Yol. 1, p. 46.) While the two companies 
operated in this district the rates on the leading articles were gener¬ 
ally the same, but the withdrawal of the Lloyd Braziliero was not • 
by virtue of any agreement. Mr. Slechta testified that there is a 
tacit understanding, equivalent in effectiveness to an agreement, 
between the Booth Line and the three conference lines operating to 
Southern Brazilian ports to keep the Amazon territory separate from 
the rest of Brazil. As Mr. Slechta explained: “ That is the general 
understanding. In fact the Booth Line is very powerful in the 
business there, not only from New York but from Liverpool. To 
start competition would mean ruination probably not only to them 

but to some of the other people.” (Yol. 1, p. 47.) 

Mr. John C. Seager likewise testified that at the time of discon¬ 
tinuing his agency for the Prince Line in 1906, there existed a 
gentlemen’s agreement to the effect that the territory from Per¬ 
nambuco to the Amazon was Booth Line ground and that the region 
between Pernambuco and Southern Brazil was the territory of the 


170 AGREEMENTS IN THE TRADE WITH SOUTH AMERICA. 

* 

Lamport & Holt Line, the Prince Line, and the Hamburg-American 
Line. Again, Mr. Lorenzo Daniels, representing the Lamport & 
Holt Line, testified (vol. 1, pp. 199-200) that in his opinion, if the 
Booth Line wanted to go to Pernambuco or one of the southern ports 
they would, as a matter of courtesy, obtain permission of the other 
lines; and likewise, if the three Brazilian conference lines wished 
to go outside of their territory it would be common courtesy to ask 
permission of the Booth Line. This unwritten understanding, the 
witness explained, is the outgrowth of many years of business con¬ 
duct, ‘‘ the Booth Line having served its territory for 40 years and 
we having served our territory for 40 years without clashing.” (Mr. 
Paul Gerhard, representing the Prince Line, testified to the same 
effect, vol. 1, p. 240.) 

Agreements in the Trade Between the United States and the River Plate. 

Southbound trade .—In the outward trade from New York to the 
River Plate an oral understanding has existed since about January, 
1912, between the Lamport & Holt Line, the Houston Line, the Prince 
Line, the Barber Line and the American & Rio Plata Line, with 
reference to the fixing and maintenance of rates. Representatives 
of these five lines, according to the testimony, meet regularly once 
a week in the offices of the different lines as may be most convenient; 
but sometimes, if it happens that conditions arise which require 
immediate attention, the matter is considered by the representatives 
of the lines on the floor of the New York Produce Exchange. The 
conference has no secretary, and merely a memorandum of the reports 
submitted by the other lines is made by any representatives desiring 
to do so. (Vol. 1, pp. 228, 276.) 

At the regular conference meetings each line reports the name 
and position of the steamers, the amount of cargo secured, the quan¬ 
tity of cargo offering, and the contracts made. Moreover, according 
to Mr. Paul Gerhard, New York agent of the Prince Line: “ Freight 
rates are determined at the conference meetings and adhered to by 
the five lines mentioned. Sometimes rates are changed between the 
meetings by mutual arrangement. It is also a part of the under¬ 
standing that merchants who contract with individual lines for the 
shipment of large quantities of materials or for shipments during a 
season or a year, have the privilege of loading all their shipments, 
as they may desire, upon any steamer or steamers of any of the five 


AGREEMENTS IN THE TRADE WITH SOUTH AMERICA. 171 

lines which may be on the berth at the time the merchants wish to 
make the shipments, but subject to arrangement with the agent of 
the particular line which closes the contract. The freight money 
earned by each of the lines is its own and is not pooled. Each agent 
represents his own line, receives his commission from his own prin¬ 
cipal and there is no pooling of commissions. There is no limita¬ 
tion upon the number or the size of the steamers that may be dis¬ 
patched by any line, nor is there any limitation as to the time at 
which any party to the understanding may dispatch steamers. * * * 
No rebates of any kind are given in this trade and there is no division 
of territory.” (Vol. 1, pp. 241, 242.) 

Replying to the Committee’s Schedule of Inquiries, Mr. James 
Knott, Managing Director of the Prince Line, confirmed the fore¬ 
going statement of Mr. Gerhard, and described the River Plate agree¬ 
ment southbound as “ an informal one applying to rates only.” The 
Committee has also been advised that in May of this year the four 
conference lines operating from New Orleans to the Argentine, viz., 
the Lamport & Holt, Prince, Barber and Houston Lines, have reached 
an understanding with the Weir Line (known as the Pan American- 
Argentine Line and operating in connection with the Illinois Cen¬ 
tral) whereby a regular monthly service will be established from 
New Orleans to Argentine by the five lines operating as a conference 
service. 

All the testimony before the Committee shows that in making 
rates the five New York conference lines are guided by the English 
and German tariffs in order to keep American and European rates 
to the Argentine on a parity. The principals of the lines in Europe 
advise the New York representatives from time to time of any 
changes made in the European rates and the New York rates are then 
changed to follow the European rates, up or down, as the case may 
be. (Vol. 1, pp. 276, 277.) “As in the case of Brazil,” Mr. Lorenzo 
Daniels testified, “ the policy of the River Plate lines has been to 
maintain tariff rates to the River Plate similar to those charged by 
the conference lines operating from Europe, in order to give Ameri¬ 
can merchants the same rates from New York as their competitors 
have from Europe. In making up the schedule of rates a committee 
of the lines was in conference with a committee of merchants from 
one of the associations, who asked to have a voice in the making of 
the rates.” (Vol. 1, p. 156.) Mr. Gerhard likewise testified (vol. 1, 


172 AGEEEMENTS IN THE TKABE WITH SOUTH AMERICA. 

p. 268) that the conference lines are guided by the European tariff 
and that they make their rates accordingly; while Mr. William E. 
Halm, Manager of R. P. Houston & Co., stated that (vol. 1, p. 276) 
“We receive many complaints from shippers on the American side 
that lower rates are being given from the other side. We investigate 
each and every one of these cases and we keep American shippers on 
a parity with those in England and Germany.” In this connection 
it may be stated that the European conference lines, comprising prac¬ 
tically all the regular lines engaged in the trade from northern Europe 
and including the Lamport & Holt Line, Prince Line, and R. P. 
Houston & Co., maintain the same rates from Europe to the River 
Plate, and allow shippers a deferred rebate of 10 per cent under 
their tariff rates, the same to be calculated every six months.^ 

There are only a few joint contracts with shippers in this trade, 
all the testimony being to the effect that it is the general practice 
for each line to make its own contracts and to assume sole liability 
for the fulfillment of the same.^ Numerous contracts with shippers 
were submitted to the Committee by several of the Argentine lines, 
and the contract made between R. P. Houston & Co. and the Hage- 
meyer Trading Co. on June 27, 1912, (vol. 1, p. 120) is illustrative 
of the individual contracts made by all the Argentine lines. The 
shipper according to this contract agrees to give the steamship line 
his entire shipments from New York to Montevideo, La Plata, 
Buenos Aires, Rosario and Bahia Blanca, for a designated period, 
usually a year, and the steamship line obligates itself to provide 
tonnage at definitely prescribed rates for all shipments offered, pro¬ 
vided reasonable notice of intention to ship is given. The contract 
expressly provides that the entire shipments of the shipper can 
be sent only by the steamers of the contracting line, or “ by steamers 
designated by the contracting line,” thus implying that, while each 
line makes its own contracts with shippers, all shipments of mer- 


1 A copy of the deferred rebate circular Issued by the European La Plata Conference 
Lines is published on pages 241 and 242 of vol. 3. The circular is signed by the Ham¬ 
burg-South America Steamship Co.; Hamburg-American Line; North German Lloyd; 
German Steamship Co., “ Hansa ” ; Chargeurs Rgunis; Lamport & Holt; R. P. Houston 
& Co.; David Maciver & Co.; H. & W. Nelson (Ltd.) ; Royal Mail Steam Packet Co.; 
Houlder Bros. & Co. (Ltd.) ; Prince Line (Ltd.) ; and Allan Line Steamship Co. (Ltd.)! 

a Several witnesses expressed their belief that there is only one important joint con¬ 
tract, the same having been entered into between the Barber Line and the Standard Oil 
Co. The contract was concluded because the Standard Oil Co. insisted on having more 
frequent sailings than Barber & Co. could give, and accordingly the contract specifies other 
lines, each line assuming a certain definite liability as to the quantity of cargo it will 
carry. 



AGREEMENTS IN THE TRADE WITH SOUTH AMERICA. 173 

chants contracting with any of the conference lines must go by 
conference steamers only, in case the contracting line can not carry 
the goods, because, as Mr. Daniels explained, the lines in designating 
steamers as per the terms of the contract would not go outside of 
their friendly conference arrangement. (Vol. 1, p. 226.) It is also 
stipulated in the contract that in case the steamship line reduces 
its rates to any other shipper during the period of the agreement, 
it will give the shipper the benefit of all such reductions during the 
period that the lower rates remain in force. 

The policy of having each line in the conference make its own 
contracts, instead of having joint contracts, was adopted to avoid the 
disadvantages of a divided responsibility. “ If the contract included 
all of the lines,” according to Mr. William E. Halm, Manager of R. P. 
Houston & Co., (vol. 1, p. 277) “ it would obligate each of those lines 
to provide tonnage, but there would be a divided responsibility which 
would not satisfy the shipper at all. In case of a very sudden rush 
of cargo, or in case of delayed steamers, there would result an accu¬ 
mulation of much more cargo than all the prompt steamers could 
move immediately, and the shipper would be shifted from one line to 
the other. I would tell him to go and see the American & Rio 
Plata Line, and they would tell him to go and see the Barber Line in 
order to get his room. But in case one line makes the contract, that 
line is responsible to furnish the shipper that room; and that form 
of contract is considered by us and by the shippers as the one that 
carries with it the best fulfillment of the contract.” Mr. Halm, how¬ 
ever, testified that while there is nothing in the contracts of his line 
that implies liberty on the part of the merchant to ship by any of the 
other lines, as a matter of fact each contractor is allowed to ship by 
any of the other conference lines working in harmony with the 
Houston Line. (Vol. 1, p. 277.) 

All of the witnesses before the Committee representing the Argen¬ 
tine lines testified that small shippers, if willing to contract, are 
offered the same rates as the big shippers and are allowed to enter 
into contracts with the lines on identically the same terms. (Vol. 1, 
p. 246.) Furthermore, in case large shippers have entered into con¬ 
tracts at rates below the regular tariff, small shippers are allowed to 
contract subsequently at the same rates for the balance of the year, it 
being the desire of the line to have all the contracts expire at the 
same time. (Vol. 1, p. 246.) In fact, the representatives of the lines 


174 AGKEEMENTS IN THE TEADE WITH SOUTH AMERICA. 

have been a unit in testifying that they are anxious and always ready 
to make contracts with as many shippers as possible. On the one 
hand the steamship lines find a large number of contracts on their 
books highly advantageous in the establishment of a regular service, 
since in the case of large steamers it is impossible to wait until the 
boat is on the berth before soliciting cargo. On the other hand, 
nearly all the merchants of any importance in the trade want such 
contracts in order that they may contract for the future and know 
that when their goods arrive in New York there will be steamers on 
hand to convey the same. 

The five above-mentioned conference lines comprise all the lines 
engaged in the American-River Plate trade, except the Norton Line. 
This line was a member of the conference until about a year ago 
when it voluntarily withdrew. (Vol. 1, p. 228.) According to Mr. 
Skeppington S. Norton’s replies to the Committee’s Schedule of 
Inquiries (confirmed by Mr. J. T. Lilly, vol. 1, p. 448), the Norton 
Line has at present no understanding with any of the conference 
lines, and does not attend the conference meetings. The conference 
lines, however, make it a point to keep the Norton Line posted as 
to the rates they are charging although that line is under no obliga¬ 
tion to maintain the same. As a general proposition, the Norton 
Line has maintained the rates of the other lines, and the relations 
between it and the five conference lines are just as cordial as they 
were when the line belonged to the conference. (Vol. 1, p. 228.) 

Northhound trade .—In the trade northbound from the River Plate 
there is an agreement between the regular lines which contains a 
deferred rebate feature. (Vol. 1, pp. 279, 417.) Mr. Herbert Bar¬ 
ber, representing the Barber Line, testified that this deferred rebate 
arrangement in the northbound trade exists between the Barber 
Line, Lamport & Holt Line, and the Houston Line, and that, accord¬ 
ing to the arrangement, rates are made in common and shippers are 
allowed a 5 per cent deferred rebate if they confine their shipments 
to conference lines for a i;»eriod of six months. The rebate allowance 
applies on all articles except cereals and linseed, which constitute a 
large proportion of the traffic from the River Plate to the United 
States. 

Exports from the River Plate to New York are very small as com¬ 
pared with the large volume of traffic southbound, and this fact 


AGREEMENTS IN THE TRADE WITH SOUTH AMERICA. 175 


probably accounts for the adoption of a deferred rebate plan by 
the three conference lines. The Prince Line steamers, although oper¬ 
ating southbound, do not return in this trade; while the Norton Line 
informs the Committee by letter that the quantity of general cargo 
northbound is so small and the delays to ships so expensive that 
it either brings the steamers back in ballast, or, when opportunity 
offers, secures full, or nearly full, cargoes of large block shipments, 
such as quebracho logs or linseed, the rates on such shipments being 
in all instances a matter of negotiation and depending on the num¬ 
ber of steamers at the Liver Plate and the requirements of shippers. 

It remains to be stated that, as regards the American trade north¬ 
bound and southbound, there appears to be a tacit understanding 
between the Liver Plate conference and Brazilian conference lines 
to respect each other’s territory. Mr. Gerhard, representing the 
Prince Line, which operates a service both to Brazil and the Liver 
Plate, asserted (vol. 1, p. 240) that there is no definite agreement 
between the two groups of lines, but that there is “ simply a tacit 
understanding ” to the effect “ don’t go for me and I won’t go for 
you.” Likewise, in reply to the question as to whether certain lines 
agree to confine themselves to the Liver Plate and stay out of the 
Brazilian trade, Mr. Slechta answered that “ there is no question but 
what a certain tacit understanding exists along that line.” (Vol. 
1, p. 47.) 

Agreement Governing the Traffic to and from Venezuela and Curacao. 

With the exception of the Loyal Dutch West India Mail 
Line, the steamers of which run indirectly by way of Haitian 
ports, the Led “ D ” Line (the * Atlantic & Caribbean Steam 
Navigation Co.) is the only regular steamship line operating 
between New York and La Guayra, Puerto Cabello, and Curacao. 
Led “ D ” Line steamers make the trip in 10 to 11 days, where¬ 
as the other line’s steamers, owing chiefly to the indirect service 
via Haiti, require 16 to 17 days. As a result, the Loyal 
Dutch West India Mail is not much of a factor in the American- 
Venezuelan trade, and carries little cargo for La Guayra and Puerto 
Cabello. (Testimony of Mr. Paul Gottheil, representing the Line 
in New York, vol. 1, p. 322.) In the trade between Maracaibo and 
the United States the Led “D” Line has practically a monopoly, 


176 AGEEEMENTS IN THE TRADE WITH SOUTH AMERICA. 

owing to the fact that its two vessels engaged in this trade are 
especially constructed with a view to overcoming the dangerous ob¬ 
structions in the channel connecting the port with the open sea. 
(Vol. 3, p. 257.) 

As regards Venezuelan ports, the Royal Dutch West India Mail 
adheres to the rates of the Red “ D ” Line, but owing to its indirect 
service has the right, by virtue of an understanding, to charge 5 or 
10 per cent less than the rates charged by the Red “ D *’ Line. (Testi¬ 
mony of Mr. Paul Gottheil, vol. 1, p. 322.) A comparison of the 
tariffs of the two lines shows the listed rates to be the same, but the 
Royal Dutch West India Mail allows a discount of 10 per cent, thus 
making its rates 90 per cent of those charged by the Red “ D ” Line. 

The differential rate understanding between the two lines, to which 
Mr. Gottheil referred, involves Curacao as well as the ports of 
Venezuela, and is explained as follows by the Red “ D ” Line in its 
answers to the Committee’s Schedule of Inquiries under date ol 
October 3, J.912: 

We have no agreement with any competing line and our only understanding 
is with the agents of the Royal Dutch West India Mail. Their steamers ply 
between New York and Amsterdam via Haiti, Curacao, ports in Venezuela, 
Trinidad, etc., and call at the following ports at which our steamers call, viz: 
Curacao, Puerto Cabello, and La Guayra. We have had no agreement with 
them for over 20 years, but they understand that if they do not charge less 
than 10 per cent less than our rates between New York, La Guayra, and Puerto 
Cabello, we will not resent their cutting our rates to and from Curacao to an 
extent that will enable them to secure about one-half of the total freight car¬ 
ried between these ports. The reason they can not get freight at the same rates 
we charge is because their steamers, calling at intermediate ports, are a longer 
time on the voyage. , 

Agreements Governing the Traffic to and from Colombian Ports on the 

Caribbean Sea. 

The Royal Mail Steam Packet Co., the Hamburg-American Line 
(Atlas service) and the United Fruit Co. are the only regular lines 
plying between New York and the Colombian ports of Puerto Colom¬ 
bia, Cartagena and Santa Marta, the first operating a fortnightly, 
and the last two a weekly, service. All these lines act in accord as 
regards both freight and passenger business. The first two com¬ 
panies have entered into written pooling and rate agreements, while 
the United Fruit Co. has, from the beginning of its operation in the 


AGREEMENTS IN THE TRADE WITH SOUTH AMERICA. 177 


trade, seen fit to charge the same rates and to work under the same 
conditions as the other lines, without, however, participating in the 
pooling arrangement and without having actually entered into a 
written or verbal agreement. 

The written agrcements between the Koyal Mail Steam Packet Co. 
and the Hamburg-American Line’s Atlas service pertain not merely 
to the American-Colombian trade, but also to the entire Central 
American and West Indian traffic of the lines. Three agreements, it 
was testified, are now in force between these lines, viz, (1) the 
original agreement of February 21, 1908, entered into at London; 
(2) the supplementary agreement of October 7, 1908. eomdnded in 
New York; and (3) the passenger agreement concluded in New York 
and governing the passenger traffic of the two lines between New 
York and West Indian, South and Central American ports.^ Briefly 
abstracted, with special reference to the American-Colombian trade, 
the essential provisions of these agreements are the following: 

(1) Sections 1 and 2 of the original agreement of February 
21, 1908, make the following provisions for a pooling arrangement 
between the lines: 

1. It is agreed that commencing from 1st March, 1908, 50 per cent of the 
freight earned (excluding earnings on refrigerated cargo, bananas, and large 
contract shipments of cement or clinkers for the Isthmian Canal Commission) 
in their respective services between New York, Jamaica, Colombian port.s. Colon, 
and vice versa, are to be pooled on the basis of 77^ per cent to the Hamburg- 
American Line and 22i per cent to the Royal Mail Steam Packet Co. 

2. A margin of 5 per cent on the above proportions to be allowed each com¬ 
pany, and if, at the end of the year, it should be found that the actual total 
earnings of each company have amounted to less than the respective proportions 
of 72^ per cent by Hamburg-American Line and 171 per cent by Royal Mail 
Steam Packet Co., then the difference between these minimum proportions and 
the proportions actually earned shall be adjusted in accordance with the fol¬ 
lowing example: 

If Hamburg-American Line shall only have earned say 70 per cent of the total 
earnings of both companies, they shall pay to the Royal Mail Steam Packet Co. 
one-half of 21 per cent of the pooled freight. 

On the other hand, if the Royal Mail Steam Packet Co. shall only have earned 
say 15 per cent of the total earnings of both companies, they shall pay to the 
Hamburg-American Line one-half of 21 per cent of the pooled freight. 


1 A memorandum of these three agreements was submitted in evidence by Mr. Christian 
J. Beck, Freight Traffic Manager of the Hamburg-American Line at New York, and may 
be found in vol. 1, pp. 524 to 530, inclusive. 

12 


25655°— VOL 4—14 




178 AGREEMENTS IN THE TRADE WITH SOUTH AMERICA. 

It is also agreed to ascertain, month by month, the quantity of cargo carried 
by the respective lines, with a view to arrange carriage in the agreed propor¬ 
tions as far as possible. 

Pursuant to the above pooling arrangement, section 4 of the sup¬ 
plementary agreement of October T, 1908, stipulates that inward and 
outward manifest sheets (these to show actual rates charged shippers) 
of both lines between New York and Jamaica, Isthmus of Panama, 
west coast of South and Central America and Colombia, be sent to 
the principals in London and Hamburg, and that copies be inter¬ 
changed between the companies at New York. On August 29, 1910, 
however, it was agreed that the exchange of voluminous manifests 
might be dispensed with, and summaries in accordance with a form 
mutually adopted by the New York representatives of the lines, be 
substituted therefor. Each line, however, reserves full right of 
access to the others’ manifests for inspection, if desired. (Vol. 1, 
p. 525.) 

(2) A joint freight tariff is to be agreed upon by the 
agencies of the companies in New York, subject to amendment by 
mutual consent (section 3 of the agreement of February 21, 1908, 
and section 5 of the agreement of October 7, 1908). Similarly, sec¬ 
tion 14 of the passenger agreement between the lines specifies the 
rates for various classes of passengers, and definitely prescribes the 
commissions to be paid to agents. 

(3) The Royal Mail Steam Packet Co. agrees not to ex¬ 
tend its service to Haitian ports and Santa Marta, as far as sailings 
to and from New York are concerned, except that in case of war with 
the Royal Dutch West India Mail Line, the Royal Mail Steam Packet 
Co. shall have the privilege of calling at Haitian ports served by the 
Dutch Line. 

(4) So-called “ commissions to shippers ” are fixed by 
section 5 of the agreement of October 7, 1908, at 10 per cent in the 
voyage from New York to Colombia, and 5 per cent from Colombia 
to New York. These commissions to shippers for the first 6 months 
shall be paid at the end of 12 months, and thereafter every 6 months, 
so that 6 months’ commissions will always remain in hand. In this 
connection the agreement expressly states that “ shippers shall be 
obligated to support the Atlas and Royal Mail lines only.” Unless 
by special agreement between the shippers and the lines, no claims 
for these rebates will be paid unless they be filed with the respective 


AGREEMENTS IN THE TRADE WITH SOUTH AMERICA. 179 

companies not later than six months after they have been earned. 
The companies also agree to disclose to each other all their rebate 
agreements not in accordance with the provisions of this agreement 
and to notify shippers that the present rebate agreements will be 
operative over both lines until their expiration, and that upon ex¬ 
piry the same will be renewed only on the basis of the new agree¬ 
ment. Mr. W. G. Sickel, Vice Director of the Hamburg-American 
Line, advised the Committee by letter that the deferred rebate agree¬ 
ment is not violated ’ when shipments are made by the United 
Fruit Co. 

Mr. C. J. Beck, Freight Traffic Manager of the Hamburg-American 
Line at New York, testified that the aforementioned agreements have 
been renewed and are in existence to-day. (Vol. 1 , p. 531.) He fur¬ 
ther stated that while the Royal Mail Steam Packet Co. and the Ham¬ 
burg-American Line have no written or verbal agreement with the 
United Fruit Co., which operates to all of the aforementioned Colom¬ 
bian ports, the latter is acting in accord with the other lines. His 
testimony is to the effect that it is tacitly understood that the United 
Fruit Co. will observe the same rates and conditions as the other 
lines, with the exception that it does not participate in the pooling 
arrangement, and that while it follows the rates there is no obliga¬ 
tion whatsoever to do so. (Vol. 1 , p. 531.) 

Mr. R. W. Boissevain, General Traffic Manager of the United 
Fruit Co., likewise testified that his company has no agreement 
(either written or verbal) with either of the other lines, but that 
when it entered the trade it came in on an equal basis and has made 
no attempt to cut rates. It is tacitly understood without any prear¬ 
ranged agreement, according to his testimony, that the United Fruit 
Co. will quote the same rates without being obliged to adhere strictly 
to the same. This tacit arrangement has existed ever since the United 
Fruit Co. entered the American-Colombian trade, and the rates on 
all commodities shipped between New York and Colombian ports in 
both directions are reported to be practically the same. (Vol. 2 , pp. 
740 - 747 .) In its replies to the Committee’s Schedule of Inquiries, 
the Management of the United Fruit Co. states that the verbal under¬ 
standing between its company and the other companies is such that 
“ it will discuss with them proposed changes in rates before the same 
are made effective in order to maintain stability in rates, which is 


180 AGKEEMENTS IN THE TKADE WITH SOUTH AMERICA. 

essential to the interests of shippers as well as the steamship com¬ 
panies. The object is that each company may be advised in advance 
of any proposed changes by the other lines, but there is no agreement 
to maintain any rate established by the others. Each company makes 
and publishes its own rates and is free to adhere to these rates or not, 
as it may see fit.” 

Agreements in the Traffic Between the Atlantic ^Seaboard of the United 
States and the West Coast of South America, via Panama. 

Agreements in the southbound tra-fflc. —Southbound, the regular 
steamship service to the ports of Colombia, Ecuador, Peru and Chile 
is confined to the following lines: 

(1) Tlie Royal Mail Steam Packet Co.; the Hamburg- 
American Line (Atlas Service); the United Fruit Co.; and the 
Panama Railroad Steamship Co., operating from New York via the 
Panama Railroad Co., the freight being transshipped at Panama to 
the South Pacific ports by the Pacific Steam Navigation Co. (now 
amalgamated with the Royal Mail Steam Packet Co.) ; the Compania 
Sud Americana de Vapores (Chilean Steamship Co.) ; and the 
Peruvian Steamship Line. 

(2) The LTnited Fruit Co.’s service from New Orleans via 

Panama. 

(3) The Munson Line, with sailings from Baltimore to 
Colon, and occasional sailings from New York. This line, however, 
has no tariff, and does not handle through shipments to South 
America. It is operated entirely in connection with separate con¬ 
tracts on materials going for the account of the Isthmian Canal Com¬ 
mission, and only handles such freight as is offered in large lots. Mr. 
Chester B. Kellogg, General Freight Agent of the Munson Steamship 
Line, testified that the line handled this traffic solely on account of 
the building of the Panama Canal, and has not developed any general 
cargo business. 

All of the lines operating from New York have adopted the 
Government’s tariff, viz.. The Panama Railroad Co.’s tariff, which at 
the time of the Committee’s investigation was Freight Classification 
and Tariff No. 7,” effective July 30, 1912, and applying to approxi¬ 
mately 50 ports on the west coast of South America. Each company 
makes and publishes its own tariff; but the tariffs of all the lines, 
furnished to the Committee in response to its request for the current 


AGREEMENTS IN THE TRADE WITH SOUTH AMERICA. 181 

rates, agreed in date and were identical in every respect with the 
exception of the title page. 

Moreover, according to the statement of the United Fruit Co.’s 

% 

management, there is a verbal understanding between it and the 
other lines to the effect that it will discuss with them proposed 
changes in rates before the same become effective, with a view to 
maintaining stability in rates and keeping each line advised in 
advance of any proposed changes by the others. But while all the 
lines have adopted the Panama Railroad Co.’s tariff, the United 
Fruit Co. emphasizes the fact that “ there is no agreement to maintain 
any rate established by the others,” and that “ each company makes 
and publishes its own rates and is free to adhere to these rates or 
not, as it sees fit.” In this connection it should also be noted that the 
United Fruit Co. observes the same rates in its New Orleans to Colon 
service as are charged by the New York lines, and that there is a 
“ tacit understanding between the lines ” that the rates from New 
Orleans shall be the same as from New York. (Testimony of C. J. 
Beck, vol. 1, p. 535.) Mr. C. W. Munson, in his replies to the Com¬ 
mittee’s Schedule of Inquiries, also states that “ the Munson Steam¬ 
ship Line has a verbal understanding with the lines running out of 
New York to Colon, by which it confines its Colon sailings from 
north of Hatteras ports to the port of Baltimore. There is no agree¬ 
ment as to making or maintaining rates of freight, but the line tries 
to secure, as nearly as possible, out of Baltimore, the same rates 

as are secured out of New York.” 

Reference should also be made to the pooling and supplementary 
agreements between the Royal Mail Steam Packet Co. and the Atlas 
Service of the Hamburg-American Line, covering the entire West 
Indian and Central American traffic of these companies. The essen¬ 
tial features of these agreements were explained in connection with 
the traffic to the Caribbean ports of Colombia, and need not be re¬ 
peated. With special reference to the New York-Colon traffic, how¬ 
ever, it is important to note that the agreements do not make pro¬ 
vision for the payment of deferred rebates, as is the case in the traffic 
to and from Colombian ports. Moreover, the original agreement, 
besides specifying rates for all classes of passengers to and from 
Colon, stipulated that the parties agreed to run their passenger 
steamers between New York and Colon alternately as far as possible. 
On August 29, 1910, however, this last provision was altered and the 


182 AGREEMENTS IN THE TRADE WITH SOUTH AMERICA. 


Royal Mail Steam Packet Co. gave the Hamburg-American Line the 
right to take passengers between New York and Colon by each of its 
weekly departures. (Vol. 1, p. 525.) 

The aforementioned rate understanding between the lines operat¬ 
ing from New York came into existence as soon as the second 
line entered the trade. Until the Hamburg-American Line estab¬ 
lished its service, the Panama Railroad Steamship Co. was the 
only one in operation between New York and Colon. When, there¬ 
fore, the Hamburg-American Line entered the trade, it was with 
the distinct understanding that it would not disturb the tariffs 
which then existed on business to the West Coast of South America; 
and the Royal Mail Steam Packet Co. and the United Fruit Co., 
which subsequently started a service, also saw fit to observe the 
Government’s tariffs. (Yol. 1, p. 534.) None of the lines, as 
they entered the trade, had any disposition to secretly cut rates 
and start a rate war; and, therefore, all the lines at the outset 
gave assurance to the other line or lines already in the trade that 
they had no intention of cutting existing rates, or of changing rates 
subsequently without giving due notice. The attitude of the lines in 
this respect is well illustrated by the policy of the United Fruit Co., 
the last to begin a service, as explained by its President, Mr. Andrew 
W. Preston. He testified (vol. 1, p. 712) that: 

When the United Fruit Co. entered actively into the transportation business 
in the Caribbean Sea about the beginning of 1904, it found there three estab¬ 
lished regular lines, namely, the Panama Railroad Steamship Line, the Ham¬ 
burg-American Line, and the Royal Mail Line. These companies had practically 
the same rates of freight between the United States and Central and South 
American points. It was not the policy of this company, in entering that 
business, to start a rate war or secretly to cut rates, or otherwise conduct its 
business except in a legitimate and proper manner, and assurances were given 
the older lines that it was not the intention of this company to do any of the 
things mentioned, but that any changes it might make in the prevailing rates 
would be public and previously made known to them. However, this company 
has in no wise obligated itself, and is not obligated, to any steamship company 
to maintain any set of rates, and is free at any time that it deems proper to 
make whatever rates it may see fit. 

Agreements in the northbound trade .—On business from the west 
coast of South America to New York the west coast carriers, viz.. 
The Pacific Steam Navigation Co. and the Chilean and Peruvian 
Steamship Lines, fix the tariff. Each of the four lines on the 
Atlantic side of the Isthmus is said to receive the same proportion 


AGREEMENTS IN THE TRADE WITH SOUTH AMERICA. 183 

of the through rate, which the Committee is advised is approximately 
30 per cent. As in the southbound trade so also in the northbound 
trade the rates are the same by-all the lines. In response to the 
Committee’s request for current rates to New York, several of the 
Atlantic lines furnished a copy of the Joint Tariff of the Pacific 
Steam Navigation Co. and the Chilean Steamship Co. (dated March 
27, 1912), naming rates from Peruvian and Chilean ports via all of 
the Atlantic lines. Separate tariffs of the Pacific Steam Navigation 
Co., providing for transshipment at the Isthmus via all of the Atlan¬ 
tic lines, were also furnished naming (1) rates from Colombian ports 
to New York, (2) rates from Ecuadorian ports (excluding Guaya¬ 
quil), and (3) rates from Guayaquil. The freight agent of the 
Panama Railroad Steamship Co. also advised the Committee by 
letter that the Peruvian Steamship Line accepts cargo from Peru¬ 
vian ports and Guayaquil for New York, and that the freight rates 
of this line are the same as those applying by the Pacific Steam 
Navigation Co. and the Chilean Steamship Co. 

In addition to the close relations between the west coast carriers 
as indicated by the foregoing tariffs, the Committee has been advised 
by several American Consular representatives that the lines are act¬ 
ing under an agreement. The reports received by the Committee are 
the following: 

Mr. Rutherford Bingham, Charge d’Affaires ad interim, at Quito, 
Ecuador, reports that: 

It is generally understood that all steamship lines on the west coast of 
South America have traffic agreements, either written or tacit, for fixing and 
maintaining freight and passenger rates. (Vol. 3, p. 235.) 

Mr. H. C. Howard, American Minister to Peru, reports that: 

The three lines running between Callao and Panama, carrying the commerce 
of the United States through transshipment at the Isthmus, are the Pacific 
Steam Navigation Co., the Compania Peruana de Vapwes y Dique del Callao, 
and La Compania Sud Americana de Vapores. They have formed agreements 
regarding passenger and freight rates. As a result freight rates are high and 
passenger rates are unusually high, considering the poor accommodations 
furnished. (Vol. 3, p. 236.) 

Mr. W. H. Robertson, consul General at Callao, Peru, reports 
that: 

The only lines running from Callao to Panama carrying the commerce of 
the United States through transshipment are the Pacific Steam Navigation 


184 AGREEMENTS IN THE TRADE WITH SOUTH AMERICA. 

Co. (British), La Compania Periiaua de Vapores y Dique del Callao (Peruvian), 
and La Compania Sud Americana de Vapores (Chilean). These companies 
have fixed agreements as to both passenger and freight rates in order to avoid 
disastrous competition. Beyond this, I am told that they have no community 
of interests of any sort as is specified in question 1 of the department's 
circular. These rates themselves, as published by the companies, entirely 
refiect the essential features of the agreement. (Vol. 3, p. 238.) 

Mr. Alfred A. Winslow, American Consul at Valparaiso, Chile, 
reports that: 

It is generally understood that the steamship lines plying between Val¬ 
paraiso and the Canal Zone have an understanding as to rates, sailings, etc., 
if not a written agreement, which has the effect of making the two lines one, 
so far as American business is concerned. (Vol. 3, p. 229.) 

Relations Between the Lines Operating from New York to the West 

Coast of South America, and Vice Versa, via the Straits of Magellan. 

Nature of trade and the method of determining rates in the south- 
hound traffic. —Three lines control the traffic from New York to the 
west coast of South America via the Strait of Magellan, viz, the 
New York and Pacific Steamship Co. (commonly known as the 
‘‘Merchants’ Line,” and operated by W. R. Grace & Co.), the West 
Coast Line (operated by Wessel, Duval & Co.), and the New York 
& South America Line (a branch of the United States Steel Products 
Co.). These lines secure nearly all of the rough cargo, usually in 
large lots, such as lubricating oil, cheaper classes of dry goods, wax, 
naval stores, lumber, cement, pipe, machinery, iron, steel, cars, loco¬ 
motives, etc., whereas the finer freight goes mainly via the Panama 
route. (Vol. 1, pp. 467, 468.) 

As contrasted with the Panama route, the trade via the Straits 
of Magellan presents two other essential differences. In the first 
place, all of the three aforementioned lines are primarily private 
carriers, and only engage freight for shippers because it enables them 
to make more frequent dispatches. The Committee is advised that 
the “ Merchants’ Line ” carries on an average about two-thirds of its 
cargo for its own account, and only one-third for outside shippers. 
In the case of the West Coast Line and the New York & South 
America Line, the proportions of the total cargo representing freight 
of outsiders are 40 per cent, and 40 to 60 per cent, respectively, 
(Vol. 1, pp. 490, 495.) Secondly, the three lines have apparently 
avoided any actions that resemble agreements or gentlemen’s under- 


AGREEMENTS IN THE TRADE WITH SOUTH AMERICA. 185 

standings as to rates in the southbound trade, and in this respect 
present one of the very few exceptions to the general rule. In reply 
to the Committee’s Schedule of Inquiries the management of each 
of these lines certifies to the fact that the line has not entered into 
any agreement or understanding with any of its competitors, either 
via the Strait of Magellan or Panama. Messrs. M. Bouvier, Robert 
Jaffray and John W. Ryan, representing respectively W. R. Grace 
& Co., Wessel, Duval & Co., and the New York & South America 
Line have, likewise, in their testimony before the Committee, most 
emphatically denied the existence of any written or implied 
agreements in this trade. (Vol. 1 , pp. 466; 479-80; 494.) In 
fact, when asked why he did not follow the general rule and 
effect a rate agreement or understanding with his competitors, es¬ 
pecially when he acknowledged the desirability of having such an 
arrangement, Mr. Bouvier answered: “ That is a very grave ques¬ 
tion; it is a question whether that is permitted or not.” (Vol. 1, 
p. 479.) 

While the statements furnished to the Committee are to the effect 
that there is no arrangement whatsoever between the lines constitut¬ 
ing this group it does appear that there is no rate cutting and that 
the lines are on the most friendly terms with each other. Mr. 
Allerton D. Hitch, representing the exporting firm of Hagemeyer 
Trading Co., stated that while there seems to be a good deal of com¬ 
petition in the getting of freight, he has found the rates of the 
several lines about the same (vol. 1, p. 126) ; and Mr. Jaffray, repre¬ 
senting the West Coast Line, testified that the position of his line is 
well known in the market and that it desires to charge the rates 
that are charged by the other lines (vol. 1, p. 485), and that he did 
not recall any instance when his line had taken freight from a ship¬ 
per at a lower rate than such shipper had been quoted on that same 
freight by the “Merchants’ Line” (vol. 1, p. 481). None of the 
lines issue a printed tariff of rates, but the “ Merchants’ Line ” and 
the West Coast Line, in response to the Committee’s request under 
date of September 13, 1912, for their current rates southbound, 
furnished detailed typewritten lists of rates. These rates were found 
upon comparison to be absolutely the same for the two lines. All 
the lines have adopted the classification issued by the steamship 
companies operating to the west coast of South America via Panama, 
viz., the classification adopted by the Panama Railroad Steamship Co. 


186 AGREEMENTS IN THE TRADE WITH SOUTH AMERICA. 

Owing to the much longer voyage, however, the rates are consider¬ 
ably lower than those charged via Panama. 

Briefly summarized, the testimony shows that the rate situation 
between the lines is adjusted in the following manner: W. R. Grace 
& Co., whose “ Merchants’ Line ” is the most powerful in the trade 
(the number of its sailings being equal to and sometimes exceed¬ 
ing the combined sailings of the other two lines), determines the 
tariff of rates, and Wessel, Duval & Co., operating the West Coast 
Line, adopt these rates in full, or follow them as closely as possible. 
On the one hand, Mr. Jaffray testified that he had no hesitancy in 
requesting W. R. Grace & Co. to supply him with a copy of their 
tariff and was given the same, and that his firm always advises 
shippers that if they will supply a share of their freight it will be 
carried at the current rates charged by the other lines. (Vol. 1, 
p. 480.) On the other hand, Mr. Bouvier, while denying any con¬ 
ference relations with Wessel, Duval & Co., explained that his firm 
knows through shippers and brokers what the West Coast Line is 
doing at all times in the matter of rates, and that the line must 
quote approximately the same rates that the “ Merchants’ Line ” 
does. (Vol. 1, p. 469.) 

Mr. Bouvier further testified that he made the list of rates sub¬ 
mitted to the Committee when the Panama Railroad Steamship Co. 
last altered its rates, and that the same was made by taking under 
consideration the English tariff and the Panama tariff, and reducing 
rates so as to make them competitive. His rates, he stated, are less 
than either those of the Panama or English lines. (Vol. 1, p. 466.) 
Mr. John W. Ryan, representing the New York & South America 
Line, advised the Committee by letter that his line uses the govern¬ 
ment tariff, that the rates charged will average approximately 20 
per cent lower than the Panama Railroad Steamship Co.’s rates, and 
that it is the policy of his line whenever possible to give shippers 
from the United States the same rates as obtained by shippers from 
Europe. 

Contracts with shippers in the southbound trade .—Much of the 
freight from the United States is carried under informal contracts 
for firms which have large interests on the west coast of South 
America. Such firms are, as a rule, given a fixed rate per ton for a 
specified period on all their shipments in bulk. These large block 
shipments often consist of different kinds of material which are not 


AGKEEMENTS IN THE TRADE WITH SOUTH AMERICA. 187 

necessarily known to the steamship line beforehand, and the rate 
applies to the whole bulk of merchandise without regard to the rates 
which .would be charged on particular articles if offered separately 
for shipment. It follows that the average contract rate on articles 
included in the large bulk consignment might be lower than the rates 
applying to the same articles when sent by exporters who are unable 
to furnish large combination cargoes. (Vol. 1, p. 487.) 

Furthermore, in at least one important instance, special rates are 
given to a large corporation. Mr. M. Bouvier testified that with the 
exception of the United States Steel Corporation, the “ Merchants’ 
Line ” treats all shippers alike in the matter of rates at a given time. 
The United States Steel Corporation, however, furnishes a very large 
tonnage, and while there is no agreement for the exclusive handling 
of the freight, the “ Merchants’ Line ” gives this corporation rates 
(which are in writing) about 15 per cent below the rates offered to 
other shippers. While the United States Steel Corporation has not 
bound itself to supply a definite amount of tonnage in consideration of 
the special rates, Mr. Bouvier explained that his line can obtain all the 
freight it wants from the corporation. (Vol. 1, pp. 490-492.) 

Relations between the lines in the northbound traffic .—The trade 
from the west coast of South America to the Atlantic seaboard of 
the United States via the Straits of Magellan, is confined to the 
same lines that control the southbound trade. Judging from the 
reports of American Consular representatives, the lines appear to be 
working in close harmony. The reports received by the Committee 
are the following: 

Mr. H. C. Howard, American Minister to Peru, reports that: 

The steamship lines maintaining a direct service between Peru and the east 
coast of the United States are the New York & Pacific Steamship Co., the New 
York & South America Steamship Co., and the West Coast Line. These lines 
have formed an agreement regulating freight rates, but this agreement has not 
been entered upon for the purpose of destroying competition, it is claimed, but 
rather for the purpose of preventing competition from becoming so active, by 
additional competitors entering the field, as to be ruinous. The rates are not 
published, being quoted upon application, and under the existing agreement are 
uniform for the three lines. (Vol. 3, p. 236.) 

Mr. W. H. Kobertson, Consul General at Callao, Peru, states that: 

I am informed that these three lines have an agreement as to freight rates 
to this coast, but that it amounts to nothing more serious than an adjustment 
of rates to those adopted by the west coast shipping companies of Europe in 


188 AGREEMENTS IN THE TRADE WITH SOUTH AMERICA. 


their various conferences there. In other words, the chief object of this tri¬ 
partite agreement is to keep rates at such a figure that the European lines will 
not be tempted to put on steamers of their own in competition in this trade. 
(Vol. 3, pp. 237-238.) 

Mr. Alfred A. Winslow, Consul at Valparaiso, Chile^ reports that: 

There seems to be some understanding between the steamship lines plying 
between the Atlantic coast of the United States and the west coast of South 
America, for there is very little, if any, cutting of rates, so far as I can learn. 
In fact, it is almost impossible to get rates quoted here on freight from the 
United States. The inquirer is referred to the New York office, unless it be a 
special matter, when the rate will be ascertained for the party, if of sufficient 
importance. (Vol. 3, p. 229.) 

Relations between the lines engaged in the trade between the Pa- 
cific ports of the United States and the west coast of South Amer¬ 
ica. —At this point brief reference might be made to the two direct 
steamship services between Pacific ports of the United States and 
Pacific ports of South America, viz., the New York & Pacific Steam¬ 
ship Co. (“Merchants’ Line”) and the Kosmos Line (affiliated with 
the Hamburg-American Line and operating to and from San Fran¬ 
cisco and Puget Sound ports). The Pacific Mail Steamship Co. also 
engages in this traffic from San Francisco by transshipment at Pan¬ 
ama via the Pacific Steam Navigation Co., the Chilean Steamship Co., 
and the Peruvian Steamship Co. Reports to the Committee from 
American Consular representatives seem to indicate that these lines 
have not entered into any agreements with each other. (Vol. 3, pp. 
235, 236, 237.) As regards Peru, the Kosmos Line does not stop at 
Callao on the northbound voyage (vol. 3, p. 239), while from the 
Chilean ports to the Pacific ports of the United Statees the rates are 
regulated by the rates quoted by the Kosmos Line (vol. 3, p. 230). 


CHAPTER VII. 

AGREEMENTS IN THE AMERICAN-MEXICAN AND CENTRAL 

AMERICAN TRADE. 


Traffic between the Atlantic and Gulf ports of the United States and 
eastern ports of Mexico and Central America. 

The relations between the various steamship lines operating 
between eastern and southern ports of the United States and eastern 
ports of Mexico and Central America can be best explained by con¬ 
sidering separately the trade routes to and from each country. In 
this respect the order of treatment will be arranged in accordance 
with the geographic location of the markets, beginning with Mexico 
on the north and ending with Costa Rica on the south. 

Mexico. —The* steamship lines operating between the United States 
and eastern Mexico are the following: New York & Cuba Mail Steam¬ 
ship Co., American-Hawaiian Steamship Co., Wolvin Line, Atlantic 
& Mexican Gulf Steamship Co., Montes Line, Atlantic Fruit & Steam¬ 
ship Co., and American & Cuban Steamship Co. With the exception 
of the last two, all of the above-mentioned lines have answered the 
questions contained in the Committee’s Schedule of Inquiries. All 
state that they are not parties to any agreement or understanding 
with any other navigation companies. In the following enumera¬ 
tion of routes, however, it will be observed that in only a few instances 
does more than one line operate over a given route. The following 
facts, as summarized from the Exporters’ Encyclopedia for 1912, the 
reports of American Consular representatives and the answers of the 
lines to the Committee’s Schedule of Inquiries, may be noted with 
reference to eastern Mexican ports. 

1. As regards Tampico, Mr. C. A. Miller, American Consul 
at the port, reports (Vol. 3, pp. 267-269) that there is practically no 
competition in the trade from ports of the United States. The New 
York & Cuba Mail Steamship Co. (Ward Line) carries practically all 
the exports from New York, while the American & Cuban Steamship 
Co.’s steamers from New York during the past two years have carried 

principally the products of the United States Steel Corporation. 

189 



190 AMEKICAN-MEXICAN AND CENTRAL AMERICAN TRADE. 


From New Orleans and Texas ports to Tampico the Wolvin Line is 
the only carrier. Similarly, the export trade from Tampico is carried 
almost entirely by the Ward Line to New York and the Wolvin Line 
to New Orleans and Texas points. With reference to the Ward Line’s 
alleged affiliation with the Conference of West India Atlantic Steam¬ 
ship Companies, Mr. Miller reports as follows, but it should be stated 
that the line makes no mention of the matter in its replies to the 
Committee’s Schedule of Inquiries: 

Some cargo to and from European points is carried by the Ward Line between New 
York and Tampico. It is on account of this fact that the Ward Line belongs to the 
subconference of the West India Atlantic Steamship Companies. * * * This con¬ 
ference has a confidential tariff, the last number of which became effective January 1, 
1913. This tariff gives a minimum rate for shipments from Tampico, Vera Cruz and 
Puerto Mexico to European points, and while the companies do not always use these 
rates, they can not give a lower rate. By joining this conference the Ward Line gets 
the National Railways to quote through rates from interior points to New York via 
Tampico, Vera Cruz and Puerto Mexico. These rates are official tariffs and must be 
approved by the Secretaria of Commiinicaciones of Mexico. The tariffs are pubhshed 
in the official papers in Mexico City, and copies are sent by the railroad to the inter- , 
ested parties. (Vol. 3, pp. 267-268.) 

2. The situation with reference to Vera Cruz is similar to 
that just explained for Tampico, the New York & Cuba Mail and the 
American & Cuban Steamship Co. operating from New York and the 
Wolvin Line from Texas points and New Orleans. Until recently the 
Atlantic & ^lexican Gulf Steamship Co. conducted a service from 
New Orleans via Port Arthur and Galveston to Tampico, Vera Cruz, 
Puerto Mexico and Laguna, returning direct or via Progreso to New 
Orleans. This service, however, the line has advised the Committee 
under date of October 10, 1912, has been discontinued. Attention is 
also called to the report of IMr. Wm. W. Canada, Consul at Vera Cruz, 
to the effect that: 

There is an agreement in regard to through freight rates between the Ward Line 
Harrison Line, Leyland Line, Wolvin line, Hamburg-American Line, French Trans¬ 
atlantic Line, Spanish Transatlantic Line, and the National Lines of Mexico and the 
Mexican Railway by which reduced through rates are made to shippers over these 
lines. The railways named will not accept through bills of lading except they be from 
lines in this conference; however, any line runnihg on regular schedule into this port 
can join the conference. * * * The agreements between the railways and steam¬ 
ship companies running out of the port seem rather to be a benefit to shippers than 
otherwise, as all lines running regularly to this port belong to the conference and 
are thus enabled to issue through bills of lading. (Vol. 3, p. 271.) 


AMERICAN-MEXICAN AND CENTRAL AMERICAN TRADE. 191 

3. From New York to Puerto Mexico the trade is handled 
by the American-Hawaiian Steamship Co. and the New York & Cuba 
Mail Steamship Co. (the latter line being run principally via Cuba), 
and from Texas ports and New Orleans by the Wolvin Line. The 
American-Hawaiian Line advised the Committee under date of August 
30, 1912, that: “The quantity of freight moving between New York 
and Puerto Mexico is such a small proportion of a cargo that it is not 
necessary to control the quantity or character of cargo by the medium 
of flexible rates, and we have therefore a regular tariff for this service. ” 
It may be added that in its enumeration of competitors, called for 
by the Committee’s Schedule of Inquiries, the American-Hawaiian 
Line did not include the New York & Cuba Mail Steamship Co. 

4. As regards the other eastern Mexican ports the New 
York & Cuba Mail Line and American and Cuban Steamship Co. 
connect New York with Progreso, Frontera, Tuxpan, Laguna and 
Campeche; the Atlantic Fruit & Steamship Co. operates between 
Galveston and Frontera; and the Atlantic & Mexican Gulf Steam¬ 
ship Co. between Mobile and Progreso. In answer to the Committee’s 
inquiry the Montes Line states that it is the only line making a 
regular run between New Orleans and Progreso. 

British Honduras .—With the exception of Orr-Laubenheimer Co., 
which operates a single steamer between Mobile and Belize, Punta 
Gorda and Stann Creek, the trade between these ports of British 
Honduras and the United States is carried by the United Fruit Co.’s 
New Orleans and New York services. The testimony (vol. 1, p. 733, 
and vol. 2, pp. 750-751), as well as the replies of the Managements of 
the two above-mentioned lines to the Committe’s Schedule of In¬ 
quiries, shows that there is no agreement or understanding between 
the two companies at present, although a few years ago the United 
Fruit Co. owned at least one-half of the stock of Orr-Laubenheimer 
Co. (vol. 1, p. 735). Mr. R. W. Boissevain, General Traffic Manager 
of the United Fruit Co. testified that “there is hardly any compe¬ 
tition” between the lines (vol. 2, pp. 750, 751); and Mr. Wm. L. 
Avery, American Consul at Belize, reported that Orr-Laubenheimer 
are allowed to operate “without opposition by the greater line 
(United Fruit Co.) and are evidently in friendly agreement with it” 
(vol. 3, p. 274). 

Guatemala .—^With the exception of the Orr-Laubenheimer Co.’s very 
limited fortnightly service between Mobile and the Guatemalan ports 


192 AMEKICAN-MEXICAlSr AND CENTRAL AMERICAN TRADE. 

of Puerto Barrios and Livingston (via the ports of British Honduras), 
the trade to and from these ports is also controlled by the United 
Fruit Co.’s New York and New Orleans services. The relation of 
these companies was explained in connection with the trade to and 
from British Honduras, and it may be added that the current rates 
for the southward voyage, as furnished to the Committee, were the 
same for both lines. Moreover, Orr-Laubenheimer Co. advised the 
Committee by letter that their freight from Central America to Mobile 
is almost wholly confined to their own importations of bananas and 
that they carry only an occasional shipment of chicle and coffee. 

The dominant position of the United Fruit Co. in the American- 
Guatemalan trade is well described by Mr. H. R. Wilson in his report 
to the Committee under date of May 17, 1912. (Vol. 3, pp. 277, 278.) 
It is here explained that the Guatemala Railroad (extending from the 
port of Puerto Barrios to the city of Guatemala), although not owned 
by the United Fruit Co., is largely controlled by the same people that 
control the steamship company and that, for the most part, the inter¬ 
ests of the two companies are identical. Besides asserting that it is 
currently reported in Guatemala that the United Fruit Co. dominates 
the Orr-Laubenheimer Line to Mobile, Mr. Wilson reports the 
following: 

By the terms of the construction contract between the Guatemala Railroad and the 
Government of Guatemala the railroad owns the pier at Puerto Barrios and 1 mile of 
beach on both the upper and lower sides thereof, covering practically the entire beach 
available for docking purposes. Since the road is controlled by the same group that 
controls the United Fruit Co., it can be easily seen that the fruit company can virtu¬ 
ally control the commerce of the country by the port of Puerto Barrios, as competing 
steamship lines may be so hampered in their docking facilities as to render calls at the 
port entirely impracticable. 

The Guatemala Railroad has recently bought the complete control of the Guatemala 
Central Railroad and all its holdings to the west and south of Guatemala City, thus 
placing all the roads of the country under the same management. It is too early as 
yet to foresee the results of this entire monopoly of the railroads by the interests allied 
to the United Fruit Co. But as a result of the monopoly by the same interests con¬ 
trolling the Atlantic traffic the rates are already very high on shipments from the 
United States and are the cause of much complaint in the country. It is generally 
thought that the heavy rates cut down very materially the commerce which might be 
built up between Guatemala and the United States. (Vol. 2, p. 278.) 

Spanish Honduras .—Four lines operate between the ports of 
Spanish Honduras and ports of the United States, viz: 

(1) The United Fruit Co., with the following services: a 
fortnightly steamer from New York to Puerto Cortez and various 


AMERICAN-MEXICAN AND CENTRAL AMERICAN TRADE. 193 

other Central American ports, returning directly to New York; a 
weekly steamer from New Orleans to Puerto Cortez via Belize and 
Puerto Barrios, returning over the same route; a weekly steamer 
from New Orleans to Tela (Honduras) via Ceiba (Honduras), and 
return; a weekly steamer from Mobile to Tela via Ceiba, and return; 
and one or two steamers per week from Mobile to Puerto Cortez, 
Limon or Boca del Toro. 

(2) The Atlantic Fruit & Steamship Co. with an irregular 
service to Puerto Cortez from New York and New Orleans. 

(3) The Hubbard-Zemurray Steamship Co. with a service 
between Mobile and Puerto Cortez. 

(4) Vaccaro Bros. & Co. with a service between New 
Orleans and Ceiba. 

« 

The competition encountered by the United Fruit Co. from the 
other three companies engaged in this trade is relatively unim¬ 
portant. Mr. B. W. Boissevain testified that, as compared with the 
other lines, the United Fruit Co.^s steamers are so much larger and its 
service so much more regular and frequent that very little cargo is 
carried by the other lines, and that “they are not really a factor in the 
trade.” (Vol. 2, pp. 751, 752.) It may be added that the United 
Fruit Co. financed and helped to organize Vaccaro Bros. & Co. 
and until a few years ago held a half interest in the company. (Vol. 
1, p. 739.) Similarly, the Hubbard-Zemurray Steamship Co. was 
organized by the United Fruit Co., which until 1907 owned 60 per 
cent of its stock. (Vol. 1, pp. 735, 736.) Within the last few years, 
however, the United Fruit Co. is said to have disposed of its entire 
interest in both the Hubbard-Zemurray Steamship Co. and Vaccaro 
Bros. & Co. (vol. 1, pp. 736, 739), and according to the replies filed 
with the Committee in answer to its Schedule of Inquiries there 
is now no agreement or understanding between any of these com¬ 
panies. Mr. Joseph Di Giorgio, President of the Atlantic Fruit & 
Steamship Co., also stated that his line does not compete with the 
United Fruit Co. in the trade to and from Spanish Honduras, and 
is not to be regarded as a public carrier. (Vol. 1, p. 796.) 

Nicaragua .—The United Fruit Co. and the Atlantic Fruit & 
Steamship Co. operate between New Orleans and Bluefields, but the 
latter company’s freight business, according to its President, has 
practically been confined to shipments consigned to a single com- 
25655 °— VOL 4—14 - 13 



194 AMEEICAN-MEXICAN AND CENTRAL AMERICAN TRADE. 

mercial house controlled by the company. (Vol. 1, p. 796.) The 
position of the United Fruit Co., therefore, appears to be as dom¬ 
inant in this trade as in all the foregoing Central American markets. 

Costa Rica .—Two regular lines connect Limon with the ports of 
the United States, viz., the Hamburg-American Line (Atlas Service) 
and the United Fruit Co. The Hamburg-American Line conducts a 
weekly service between New York and Limon via ports of Jamaica, 
and a monthly service to Boca del Toro (Panama); whUe the United 
Fruit Co. operates (1) a weekly steamer from New York to Limon via 
Jamaica, Colon and Boca del Toro, returning over the same route 
with the exception of the call at Boca del Toro, (2) a weekly steamer 
from Boston to Costa Rica returning direct to Boston, (3) a weekly 
steamer from New Orleans to Colon via Puerto Barrios and Limon 
returning over the same route, and (4) one or two steamers per 
week from both Mobile and Galveston to Puerto Cortez, Limon or 
Boca del Toro direct. 

The traffic between New York and Limon is governed by the 
agreement of February 21, 1908,^ between the Atlas Service and the 
Royal Mail Steam Packet Co. and the tacit understanding ^ by which 
the United Fruit Co. observes the same rates and conditions as the 
other two lines, with the exception of the pooling arrangement. 
This relationship between the lines was confirmed by Mr. Chester 
Donaldson, American Consul at Limon, who reported to the Com¬ 
mittee that in the trade to the United States the United Fruit Co. 
is the principal carrier, that it establishes the rates, and that the other 
lines carrying freight from the port charge these rates. (Vol. 2, 
p. 276.) Moreover Section 5 of the agreement of February 21, 1908, 
between the Atlas Service and the Royal Mail Steam Packet Co. 
provides that: 

As regards Port Limon it is not the intention of the Royal Mail Steam Packet Co. 
to extend their present services to that port, but they reserve the right to call there, 
and in the event of any steamers of the Royal Mail Steam Packet Co. requiring to call, 
it is agreed that the two companies shall meet and endeavor to make such arrange¬ 
ments as will least interfere with the interests of each other. 

1 This agreement between the Atlas Service and the Royal Mail Steam Packet Co. is discussed on pages 
176-180 of the chapter on “Agreements in the Trade Between the United States and South America.” The 
nature of the tacit understanding, under which the United Fruit Co. conforms to the rates and condi¬ 
tions of the agreement of February 21,1908, with the exception of the pooling arrangement, is described on 
pages 181 and 182 of the same chapter 



AMERICAN-MEXICAN AND CENTRAL AMERICAN TRADE. 195 

Traffic Between New York and the West Coast of Central America 

and Mexico via the Isthmns of Panama. 

According to letters received by the Committee from the Manage¬ 
ments of the Atlantic lines operating between New York and Panama 
via the Panama Railroad Co.—viz., the Panama Railroad Steamship 
Co., the Hamburg-American Line (Atlas service), the Royal MaU 
Steam Packet Co. and the United Fruit Co.—it appears that all these 
lines transship their New York cargo by the Pacific Mail Steamship 
Co. for distribution to Central American and Mexican ports on the 
Pacific. The current tariffs furnished by these Atlantic lines were 
found to be the same for all the ports reached. Mr. C. J. Beck, in 
testifying for the Hamburg-American Line, asserted that all the 
freight of this line destined to west coast ports of Central America 
and Mexico is transshipped by the Pacific Mail Steamship Co. He 
also stated that this business is controlled by the same rate under¬ 
standing which governs the four Atlantic lines in connection with 
the trade between New York and the west coast of South America. 
(Vol. 1, p. 535.)^ One prominent firm, exporting largely from New 
York to western Central America, expresses the situation as follows:— 

We find that the facilities for shipment from New York to Panama are quite ade¬ 
quate, in fact there is usually an opportunity two or three times a week. The prin¬ 
cipal complaint that we have to make is that there is only one common carrier avail¬ 
able for us from Panama to our porta of entry on the west coast of Central America. 
It has a schedule showing semi-monthly sailings but this is not always to be depended 
upon. No competition is offered because, as we understand it, the rates of all the car¬ 
riers from New York to Colon are subjected to a traffic arrangement with the railroad 
company operating from Colon to Panama and the one carrier referred to on the Pacific. 
We have been informed that this traffic arrangement is the same with all the lines on 
the Atlantic plying to Colon, so that all the Atlantic lines have an arrangement to 
maintain equal rates and consequently there can be no real competition. 

The Hamburg-American Line and the Royal Mail Steam Packet 
Co. have also advised the Committee that in the traffic from Pacific 
ports of Central America and Mexico to New York they use the 
Pacific Mail Steamship Co.'s Freight Tariff No. 25, applying from 
“Mexican and Central American ports to New York via the Isthmus 
of Panama in connection with the Panama Railroad Co. and the 
Panama Railroad Steamship Co." 


1 For a discussion of the rate understanding between the Atlantic lines operating via the Isthmus of 
Panama see page 180 of the chapter dealing with “Agreements in the trade between the United States and 
South America.” 




196 AMERICAN-MEXICAN AND CENTRAL AMERICAN TRADE. 

Traffic between Pacific Coast Ports of the United States and the West 

Coast of Central America and Mexico. 

Enumeration of steamship lines and the relations between these 
lines .—Five steamship lines control the trade coming under this 
heading, viz: 

(1) The Pacific Mail Steamship Co. (an American cor¬ 
poration), maintaining a service between San Francisco and Panama 
and calling at the intermediate ports of Mazatlan, San Bias, Man¬ 
zanillo, Acapulco, Salina Cruz, (Mexico); Ocos, Champerico, San 
Jose, (Guatemala); Acajutla, La Libertad, La Union, (Salvador); 
Amapala, (Honduras); Corinto, San Juan del Sur, (Nicaragua); 
and Punta Arenas, (Costa Rica). 

(2) The Kosmos Line (a German corporation), operat¬ 
ing steamers between Puget Sound and Europe via the Strait, of 
Magellan, and calling at the intermediate port of San Francisco 
as well as nearly all Mexican, Central American and South American 
ports. 

(3) The Salvador Railway C!o. (an English corporation), 
maintaining a steamship service to the various Pacific ports of Cen¬ 
tral America from Corinto (Nicaragua), on the south, to Salina 
Cruz (Mexico), on the north, transshipping San Francisco cargo at 
Salina Cruz to the American-Hawaiian Steamship Co. and the 
Kosmos Line. 

(4) The Mexican National Steamship Co., operating a 
line along the Pacific coast of Mexico to Salina Cruz, with trans¬ 
shipment at this port to the American-Hawaiian Steamship Co. 
This company has a trafiic arrangement with the American-Hawaiian 
Line. 

(5) The Jebsen Line, operating at present only one 
steamer. This company, according to information furnished by ' 
the management of the Pacific Mail Steamship Co., is a competitor 
only as concerns business between San Francisco and Mazatlan 
(Mexico). 

Of the aforementioned services the Pacific Mail Steamship Co. is by 
far the most important; and according to the replies of Mr. R. P. 
Schwerin, its Vice President, to the Committee’s Schedule of In¬ 
quiries, this company has no traffic or rate agreement with any of the 
other lines operating between American Pacific coast ports and the 
ports of Mexico and Central America. But while the existence of any 


AMERICAN-MEXICAN AND CENTRAL AMERICAN TRADE. 197 

agreements or understandings between the lines has been denied by 
the steamship interests, the freight tariffs of the lines, as well as the 
statements of American Consular representatives and certain impor¬ 
tant importing firms at San Francisco, indicate that the Pacific Mail 
Steamship Co. is the dominant power in the trade and that the other 
lines adopt its rates and refrain from antagonizing its interests. 
Briefly summarized the following sources of information would seem 
to warrant this conclusion. 

1. The tariffs of the Pacific Mail Steamship Co. (Freight 
Tariff No. 58, dated November 25, 1912), and the Kosmos Line 
(Freight Tariff No. 17, also dated November 25, 1912), while dif¬ 
fering in form, agree in every respect as regards rates from Central 
American ports to San Francisco. Both lines also furnished the 
Committee copies of their published freight tariffs applying from 
San Francisco and Pacific coast ports to west coast ports of Central 
America and Mexico. Both tariffs went into effect March 25, 
1912, and are identical as to rates. In this connection Mr. Schwerin 
testified, (vol. 2, pp. 865-866) that the tariffs of the two lines were 
not, as far as he knew, fixed in conference, and that there is no 
understanding or agreement that the rates specified therein will 
be adhered to. Instead, according to this testimony, “the Pacific 
Mail published its tariff and the Kosmos Line followed it.” 

2. The reports of Mr. H. R. Wilson, Charge d’Affaires at 
Guatemala (under date of May 17, 1912), Mr. A. G. Brown, Vice 
Consul in Charge at Mazatlan, Mexico (under date of October 16, 
1912), and Mr. T. Hinckley, Consul General at San Salvador (under 
date of November 26, 1912) show that while the lines may not 
actually have entered into an agreement with each other they con¬ 
duct their business in such a manner as to give the general impres¬ 
sion that they are cooperating under a rate understanding. The 
following extracts of these reports, pertaining to the west coast 
business, may be reproduced m this connection: 

Mr. H. R. Wilson reports that: 

The steamship lines engaged in the trade on the Pacific side of Guatemala—that is, 
between the Pacific ports of this country and San Francisco—are: the Pacific Mail 
Steamship Co., 'the Kosmos Line, and the Salvador Railway Co. The last connects 
at Sahna Cruz with the American-Hawaiian Steamship Co., and by way of Tehuan¬ 
tepec and Puerto Mexico with New York. The prevalent opinion in this city is that 
a freight agreement exists between these three Hnes, but I have been unable to ob- 


198 AMERICAN-MEXICAN AND CENTRAL AMERICAN TRADE. 


tain a copy of it. However, the freight rate for the most important commodity, coffee, 
is identical on the three routes, $9 per ton of 2,000 pounds, to San Francisco. Simi¬ 
larly for the return trip the same rate is charged by all three on flour, $6.50. But 
these rates are generally considered not at all unreasonable, taking into considera¬ 
tion the serious weather delays occasioned by the necessity of loading and unloading 
in the open roadsteads of the Pacific ports. I am therefore of the opinion that their 
agreement is simply to prevent a ruinous competition among themselves, and is 
not designed to, nor does it result in, a restriction of trade. (Vol. 3, pp. 276, 277.) 

Mr. A. G. Brown reports that; 

The only agreement existing between the steamship companies at Mazatlan is 
the tariff of freight rates between this port and San Francisco. This is done by 
special agreement between the companies. The parties to this agreement are the 
Pacific Mail Steamship Co., the Kosmos Line and the Jebsen Line. A copy of the 
freight tariff is herewith inclosed. An effort is now being made to advance the 
rates, for it is claimed that they are too low for any money to be made by the com¬ 
panies. (Vol. 3, p. 273.) 

Mr. T. Hinckley reports the following with reference to the close 
cooperation between the lines in the transportation of coffee, the 
principal article exported from western Central America and Mexico; 

The Pacific Mail Steamship Co., the Kosmos Line, and the steamers of the Salvador 
Railway Co. are co-carriers with the West Indian and Atlantic combine, mentioned on 
page 9 of the Report of the Royal Commission on Shipping Rings (Cd., 4669, 1909), 
and consequently grant rebates, but this is done only under certain circumstances on 
coffee exportations. There are no other kinds of rebates or special privileges granted. 
Every year the Pacific Mail Steamship Co. and the Kosmos Line form an agreement for 
the purpose of fixing rates and tariffs, particularly on coffee exportations, and these 
rates and tariffs are conformed to by the steamers of the Salvador Railway Co. It may 
be seen that competition is destroyed by agreement by the first two companies men¬ 
tioned, which operate steamers between Salvadorean and American ports, and that 
competition could exist, but does not, between these two companies and the company 
last named, which is engaged in the foreign-carrying trade of the United States 
between Salvadorean ports and Salina Cruz, Mexico, because it chooses to conform 
to the fixed rates and tariffs. (Vol. 3, pp. 282-283.) 

3. One of the largest importing firms of San Francisco con¬ 
fidentially reported the following to the Committee under date of 
February 28, 1913, with reference to the relations between steamship 
lines operating between southern Mexico and Central American ' 
republics and San Francisco: 

The trade in which we specialize is confined to southern Mexico and the Central 
American republics, and we have devoted many years to this business. We feel that 
as regards this entire market we are conversant with the different factors which aid 
or hinder business in this territory, and of which transportation is a very prominent 




AMERICAN-MEXICAN AND CENTRAL AMERICAN TRADE. 199 


one. As you are doubtless aware the steamship lines which cany cargo to and from 
these countries are the Pacific Mail Steamship Co., the Salvador Railway Co., working 
from Corinto north to Salina Cruz and transshipping San Francisco cargo to the Ameri- 
can-Hawaiian Steamship Co. and the Kosmos Line of Hamburg, Germany. The 
service announced by the Pacific Mail Steamship Co. is a steamer leaving thiee times 
a month from both Ancon and San Francisco, receiving cargo and touching at the 
principal Central American and Mexican ports in conformity with the sailing schedule 
issued. The Salvador Railway Co. operates two steamers, sailing every few days 
from Salina Cruz to the various ports as far south as Corinto. The American-Hawaiian 
Steamship Co. has steamers practically every six days from SalLia Cruz north and 
frequent opportunities on the southbound run. The Kosmos Line nms very irregu¬ 
larly, furnishing about one steamer per month, some steamers not calling at all at 
Central American ports either northbound or southbound. 

From the above it would seem that, for the tonnage handled, San Francisco is 
receiving very good service with her southern connections, but as a matter of fact 
such is not the case. These three lines maintain the same tariff, which to Central 
American ports is on the basis of |10 per ton of 2,000 pounds or 40 cubic feet, ship’s 
option, and $10 per 2,000 pounds on coffee from Central American ports to San Fran¬ 
cisco. The Kosmos Line, making so few trips and touching so few ports, is of little 
importance in the Central American trade to San Francisco. The Salvador Railway 
Co. is very active, would and could pick up a good deal of coffee for San Francisco, 
and would be an advantageous factor if it were not for the fact that the American- 
Hawaiian Steamship Co. apparently is unwilling to give them any service what¬ 
soever from Salina Cruz north. At this writing (Feb. 28, 1913) there are many 

firms in this city, among whom we might mention Messrs. -, -, -, 

and ourselves, who have bills of lading dated January, a great part of which coffee 
must certainly have reached Salina Cruz on or before the middle of that month, and 
although the American Hawaiian Steamship Co. has had many steamers sailing 
out of Salina Cruz they apparently would not bring this coffee forward, and an 
inquiry recently made of the Salvador Railway Co.’s agent at Salina Cruz shows 
the coffee at that point still waiting opportunity to go forward. (Here follow num¬ 
erous details to illustrate the foregoing contention.) * * * 

The above statement is to show that we are practically dependent upon the Pacific 
Mail, and for your information might advise that the opinion here is current that, 
although the Salvador Railway Co. is anxious and eager to receive and handle in a 
satisfactory manner cargo to and from San Francisco, the American-Hawaiian Steam¬ 
ship Co. evidently figures that it has for a number of years operated, and still con¬ 
tinues to operate, on a very friendly basis with the Pacific Mail, and for the appar¬ 
ently small coffee tonnage, on which it would only get probably one-half the rate, it 
does not intend to antagonize the Pacific Mail, which line considers that the Central 
American business from San Francisco belongs to itself. They therefore flatly dis¬ 
courage it. 

Rebates to shippers discontinued .—Although rebates were granted 
by the Pacific Mail Steamship Co. on shipments from Central America 





200 AMERICAN-MEXICAN AND CENTRAL AMERICAN TRADE. 

and Mexico to San Francisco until a few years ago/ the Committee 
is advised that no rebates are allowed to shippers at present. (Vol. 
2, p. 876.) The testimony also indicates that no written or verbal 
contracts are made with shippers in this trade, and that, as a general 
rule, no difference in rates exists as between large and small shippers 
(vol. 2, pp. 876-877), although, since there is nothing to prevent it, 
the line feels free to cut rates occasionally in order to secure a large 
order of freight (vol. 2, p. 877). 

Conference of West India Atlantic Steamship Companies. 

For many years the above-mentioned conference, with head¬ 
quarters in London, has controlled the rates on European coffee ship¬ 
ments from the west coast of Mexico and Central America by the 
following Atlantic lines: The Royal Mail Steam Packet Co., Cie. 
Generate Transatlantique, Hamburg-American Line, Leyland Line 
(International Mercantile Marine Co.), Harrison Line, Cia. Transat- 
lantica de Barcelona, La Veloce Navigazione Italiana a Vapore and the 
Cuban Line (Messrs. E. Bigland & Co.). As indicated by the attached 
lebate circular of the Pacific Mail Steamship Co. for the season of 
1912-13, shippers of coffee from west coast ports of Mexico and Cen¬ 
tral America to Europe are allowed a 10 per cent deferred rebate 
(computed on the basis of a 12 months^ account with six months 
deferment), provided they “have not made or been interested in, 
directly or indirectly, either as principals or agents, ” any shipments 
of coffee other than via:— 

(1) The steamers of the Pacific Mail Steamship Co. to 
Panama, over the Panama Railroad Co., and thence by the steamers 
of the connecting West India Atlantic Conference lines. 

(2) The steamers of the Pacific Mail Steamship Co., the 
Ga. Naviera del Pacifico and the Salvador Railway Co. to Salina 
Cruz, over the Tehuantepec National Railroad to Puerto Mexico, 
and thence by the steamers of the connecting West India Atlantic 
Conference lines. In addition to the conference lines enumerated 

I Mr. R. P. Schwerin advised the committee (vol. 2, p. 1223) that during the coffee season of 1908 and 
1909 there was a 25 per cent reduction from Central America to San Francisco, the tariff rate being $10. 
This reduction was also effective the following season up to Jan. 25, 1910, when the rate was reduced to 
$3. On sugar shipments from Central America to San Francisco the line also occasionally made a special 
reduction of W cents per ton, the last reduction having been made in July, 1912 On limes from Acapulco 
to San Francisco there was a refund of $2.50 per ton up to September, 1911, while on logs from Central 
America a $1.50 refund from the tariff rate was allowed until Sept. 12,1911. 




AMERICAN-MEXICAN AND CENTRAL AMERICAN TRADE. . 201 

above, the rebate circular of 1912-13 stipulates that shipments from 
Puerto Mexico by steamers of the PIolland-American Line will not 
invahdate the rebates. 

(3) The steamers of the Kosmos Line via Magellan. 
This line has always been regarded as a differential route. Thus, if 
the coffee rate was made 80s. by the conference lines, the Kosmos 
Line would make its rate say 20s. less on account of the longer haul. 
(Vol. 2, p. 874.) 

(4) Shipments via Puerto Barrios (Guatemala) if carried 
from that port by vessels of the West India Atlantic Conference lines. 

It should be noted that the attached rebate circular refers exclu¬ 
sively to European coffee shipments and makes no reference to ship¬ 
ments destined to New York via any of the above-mentioned routes. 
Mr. R. P. Schwerin, however, testified (vol. 2, pp. 873, 874, 875) that 
the Pacific Mail Steamship Co. and the United States Government (as 
owner of the Panama Railroad and Panama Railroad Steamship Cos.) 
each sent a representative to the London Conference; that the Govern¬ 
ment has sent its representative to this London Conference for 
years, with respect to the determination of coffee rates; that the 
coffee rates to New York from the west coast of Mexico and Central 
America were adjusted on the basis of the European rates; and that 
the Pacific Mail and the Government have an understanding with the 
other conference lines as to the fixing of rates to the United States so 
far as business may originate on the west coast of Central America 
and Mexico and be destined to New York via the Panama Railroad 
and the Panama Railroad Steamship Cos. Judging from the testi¬ 
mony before the Committee, the United Fruit Co., although not 
mentioned in the attached rebate circular, observes the rates of the 
other lines as far as trade to New York is concerned. (Vol. 2, p. 873.) 
In fact Mr. R. P. Schwerin asserted that “There has practically been 
no competition from the west coast of Central America to New York.^^ 
(Vol. 2, p. 875.) 

Mr. Schwerin, however, testified that the aforementioned rate 
understanding in no way governs the trade from Central American 
and Mexican ports to San Francisco and that the Pacific Mail Steam¬ 
ship Co. declined to be governed in its San Francisco rates by the 
European conference, when requested to do so by the Panama Rail¬ 
road Co. and the Guatemala Railroad Co. (Vol. 2, pp. 873-874.) 
According to his explanation the government authorities represent- 


202 AMERICAN-MEXICAN AND CENTRAL AMERICAN TRAD*. 

ing the Panama Railroad Co. discussed with the Pacific Mail repre¬ 
sentatives the question of rates to San Francisco versus the rates to 
New York, and repeatedly requested the Pacific Mail to raise its rates 
so as to equalize via San Francisco on the ground that the low rates 
charged by the Pacific Mail were instrumental in diverting business 
from Central America to San Francisco and away from New York via 
the Government’s line. (Vol. 2, p. 872.) In this connection it 
appears that Europe received approximately 70 per cent of all coffee 
shipped from the west coast of Central America and that the remaining 
30 per cent was divided between San Francisco and New York, ap¬ 
proximately one-third of this amount, or 10 per cent of the total 
Central American coffee output, going to San Francisco. (Vol. 2, 
pp. 872, 873.) In other words, the Panama Railroad Co. used to 
handle about 90 per cent of the Central American coffee output, but, 
as explained by Mr. Schwerin (vol. 2, p. 873), “the rates via San 
Francisco were abnormally low and diverted coffee away from the 
Isthmus route. There has always been a question, having in mind 
the European and New York rates, as to whether coffee can be 
shipped most advantageously from Central America via the Isthmus 
to New York with transshipment at that port, or via European lines 
from Colon, or via the Puerto Barrios or Tehuantepec routes. The 
haul from the coffee district to Salina Cruz is about 280 miles as against 
1,400 miles to the Isthmus of Panama, so when the Salvador Railroad 
and the National Railroad of Mexico started to haul coffee to Salina 
Cruz and via the Tehuantepec route to Europe, and in connection 
with the American-Hawaiian Line to San Francisco via Salina Cruz, 
the Panama Railroad Co. saw its business dropping away and con¬ 
sequently an issue was raised in relation to the Pacific Mail’s San 
Francisco rates. The Panama Railroad Co. wanted the Pacific Mail 
to raise its rates to San Francisco. Mr. Keith, of the Guatemala 
Railroad, also insisted on the rates being made the same to San Fran¬ 
cisco as to New York, or he would cut the rate via the Guatemala 
Railroad to Puerto Barrios and the United Fruit Co.’s steamers to 
New York.” (Vol. 2, p. 873.) These requests for an equalization of 
the San Francisco rates with those to New York were, as already 
stated, refused by the Pacific Mail Steamship Co. 


Shipments vid Puerto Barrios, if carried from that port by the vessels of the Atlantic Lines herein enumerated, 
will not invalidate the within mentioned rebate; neither will shipments vid Tehuantepec when carried 
from Puerto Mexico by steamers of the Holland-America Line. 


Panama Route.—Tehuantepec Route 


PACIFIC MAIL STEAMSHIP COMPANY. 

WEST COAST OF MEXICO AND CENTRAL AMERICA 

REBATE CIRCULAR. 

Season 1912-1913. 


Shippers of Coffee from the West Coast Ports of Mexico and of Central 
America will, subject to the following conditions, be granted by the 
Co-Carriers on all Coffee through freighted, a Rebate of Ten per cent, 
on the Freight paid, as per Bills of Lading, from free alongside steamer 
at port of shipment to terminal port in Europe. 

The Rebate will be computed up to 30th September, 1913 (Bill of 
Lading date), and will be payable after the 31st March, 1914, but only 
to Shippers who, during the said season, have not made or been inter¬ 
ested in, directly or indirectly, either as Principals or Agents, any ship¬ 
ments of Coffee from West Coast Ports of Mexico and/or Central America 
to Europe, other than vid — 

(I) The steamers of the Pacific Mail Steamship Company to Pan¬ 
ama, over the Panama Railroad to Colon, and thence by the steamers 
of the following Atlantic Lines:—-The Royal Mail Steam Packet Com¬ 
pany, Compagnie G6n6rale Transatlantique, Hamburg-Amerika 
Linie, Leyland Line, Harrison Line, La Veloce Navigazione Italiana 
a Vapore and the Compania Trasatlantica de Barcelona. 

(II) The steamers of the Pacific Mail Steamship Co., the Cia. Na- 
viera del Pacifico, and the Salvador Railway Co., Ltd., Steamship 
service to Salina Cruz, over the Tehuantepec National Railroad to 
Puerto Mexico and thence by the steamers of the following Atlantic 
Lines:—The Royal Mail Steam Packet Company, Compagnie G6n4- 
rale Transatlantique, Hamburg-Amerika Linie, Leyland Line, Har¬ 
rison Line, Compania Trasatlantica de Barcelona, and the Cuban 
Line (Messrs. E. Bigland & Co.). 

(III) The Steamers of the Kosmos Line vid Magellan. 

Shippers claiming the Rebate, must fill up and sign forms, in trip¬ 
licate, which can be obtained from the under-noted Mr. E. M. Hunter, 
or any of’the Agents of the Co-Carriers. 

Claims in connection with shipments by the steamers of the Pacific 


Mail Steamship Co. up to the 30th September, 1913, must be presented 

to the under-noted E. M. Hunter, Special Agent of that Company at 

Guatemala City, Guatemala, for certification not before the following 
Ist October, 1913, nor later than the 31st December, 1913, after which 
date no claims will be acknowledged. Payment to oe made in Europe 

after the 31st March, 1914, subject to everything being in order. 

Signed for and on behalf of the here undermentioned Co-Carriers, viz.: 
The Pacific Mail Steamship Co., The Royal Mail Steam Packet Com¬ 
pany, Compagnie G4n6rale Transatlantique, Hamburg-Amerika Linie, 
Leyland Line, Harrison Line, La Veloce Navigazione Italiana a Vapore, 
Compahia Trasatlantica de Barcelona. 

( Special Agent in Central 
America of the Pacific 
Mall Steamship Company. 

Guatemala City, 30th September, 1912. 


o 




203 


E. —The attention of Shippers is called to the necessity for legible and correct marking and portmarking. 
Much inconvenience has been caused b^ omissions and neglect in this respect, and the Joint Carriers will 
not accept responsibility for correct delivery of Bags insufliciently or incorrectly marked. 















i 

I 

i 

1 

1 

i 




CHAPTER VIII. 

AGREEMENTS IN THE AMERICAN-WEST INDIAN TRADE. 


Rate Arrangements in the Trade Between the United States and Cuba. 

The regular lines operating between the United States and Cuban 
ports may be classified into three groups, viz., those to and from New 
York, those to and from other Atlantic ports, and those to and from 
the Gulf ports. These groups will be considered in the order 
indicated. 

1. Lines between New York and Cuba :— 

With reference to the various Cuban ports served these lines are 
the following:— 

(f) The New York cfi Cuba Mail Steamship Go. and the 
American (& Cuban Steamship Line to Havana. —The relations be¬ 
tween these two lines have not been ascertained because the latter 
company has failed to reply to the Committee’s Schedule of In¬ 
quiries, and has sent so few of its current rates as to make com¬ 
parison with those of the other line impossible. Furthermore, the 
Management of the line advised the Committee that most of the 
items of freight on which current rates were desired have not 
been carried by the line, and that it would be necessary not only . 
to know the size of the lot to'be moved but to compute special 
rates. Judging from the report of Mr. A. M. Beaupre, American. 
Minister to Cuba, however, the New York and Cuba Mail is the 
controlling line in this trade. In fact, he states that “ no expla¬ 
nation can be found of the practical lack of competition other 
than the existence of a compensatory agreement or understand¬ 
ing” (vol. 3, p. 288). In this connection ^ it may be stated that 
agreements for a division of Cuban ports among certain lines were 
in existence until recently, but all the lines interested have reported 
to the Committee that these agreements have been abrogated and that 
to-day no understanding exists between the lines. The Management 

of the Compania Maritima Cubana, operating from New York to 

205 



206 AGREEMENTS IN THE AMERICAN-WEST INDIAN TRADE. 

north Cuban ports, with the exception of Havana, replied under oath 
to the Committee’s Schedule of Inquiries that, “ this company has no 
understanding or agreement with any steamship line, but up to six 
months ago there was an understanding with the New York & Cuba 
Mail Steamship Co. for a territorial division of destination ports in 
the Island of Cuba. There was no agreement, however, as to fixing 
freight rates or regulating the number or time of sailings or meeting 
any competition of competitive lines.” This understanding with the 
Compania Maritima Cubana was acknowledged by the New York & 
Cuba Mail in its replies, but the line also adds that the understanding 
has now been “ completely abrogated The Committee, however, is 
advised that the New York & Cuba Mail Steamship Co. is at present 
a stockholder in the Compania Maritima Cubana. 

Until September, 1911, the Atlas Service of the Hamburg-Ameri¬ 
can Line also conducted a service for about one year to Havana, 
Cienfuegos, and Manzanillo, and according to the testimony of Mr. 
C. J. Beck, its Freight Traffic Manager, the line “ had a tacit but un¬ 
written understanding as to freight rates with the New York & 
Cuba Mail Line” (vol. 1, pp. 518-519). In its report to the Com¬ 
mittee the Management of the New York & Cuba Mail also states 
that the line is a member of the Gulf Foreign Freight Committee 
(to be discussed later), consisting of the five lines operating from 
Key West, Mobile, New Orleans and Galveston to Cuban ports, and 
vice versa. According to this statement ‘‘the line attends the meet¬ 
ings of this Committee very infrequently—perhaps not more than 
once a year—and our only reason for belonging to the Committee is 
that we may obtain information as to the freight rates from the 
Mississippi Valley to the seaboard, and from the Gulf to Cuban 
ports, in order to enable us to meet their competition.” 

(2) The Compania Maritima Cubana (the Munson Line 
being the General Agent of this company at New York) jto the north 
Cuban ports of Matamas^ Cardenas^ Sagua^ Caibarien^ Nuevitas^ 
Chapara^ Puerto Padre^ Gibara and Antilla (Nipe Bay), and the 
Royal Mail Steam Packet Go. to Antilla. —Mr. C. B. Kellogg, Gen¬ 
eral Freight Agent of the Munson Line, testified that the Eoyal Mail, 
stopping only at Nipe Bay, is the only other line calling at any of 
the above-mentioned ports (vol. 1, p. 652). No understanding now 
exists between the lines or has existed at any time (vol. 1, p. 653). 


AGREEMENTS IN THE AMERICAN-WEST INDIAN TRADE. 207 

The Munson Line has been operating to Nipe Bay ever since it be¬ 
came a port, and according to Mr. Kellogg, after the Koyal Mail 
entered the trade a few years ago it “naturally followed our rates.” 
A comparison of the typewritten lists of current rates, as furnished 
to the Committee, shows the rates of the two lines to be the same in 
nearly every instance, a condition which Mr. Kellogg attributed to 
the friendly relations between them. The Koyal Mail, he stated, 
“ goes so far as to ask us whether our rates are being maintained in 
some cases where shippers have claimed that they have had lower 
rates. They lead us to infer by these questions that they are main¬ 
taining our rates, and our reply lets them know whether we are 
maintaining the rates” (vol. 1, pp. 652, 653). This rate situation 
seemed to Mr. Kellogg “ to be an evolution of the times, not only in 
the steamship business but everywhere else” (vol. 1, p. 653). The 
Munson Line also operates the only line from Mobile to Cuba, and is 
a member of the Gulf Foreign Freight Committee. 

(3) The New York c& Cuba 31 ail Steamship Co. to the 
south Cuban ports of Cienjuegos., Mamanillo and Santiago.^ and the 
Hamburg-American Line to Santiago. —With the exception of the 
American & Cuban Steamship Line, which has sailings to Cuban 
ports other than Havana only every three weeks, the New York & 
Cuba Mail and the Hamburg-American are the only lines connecting 
New York with south Cuban ports. The Hamburg-American Line, 
however, operates only to Santiago, as a way port in connection with 
its Jamaica, Colon and Port Limon service, having withdrawn from 
Cienfuegos, Manzanillo and Havana in September, 1911, owing to the 
unsuitable character of its steamers for the trade (vol. 1, p. 519). 
Prior to this withdrawal, the Hamburg-American Line, as already 
stated, had a rate understanding with the New York & Cuba Mail 
Line as regards the Cuban trade, but at present the two lines operate 
independently to Santiago, the first line, with a weekly service, con¬ 
trolling about 60 per cent of the port’s trade, and the latter with 
sailings about every 10 days. Mr. C. J. Beck, however, testified 
that while no understanding exists the “ two lines aim not to under¬ 
quote each other,” and that “ if the New York & Cuba Mail fixes a 
rate on a certain commodity they will probably tell us of it, or we 
will learn of it in the market, and we will adjust our rates accord¬ 
ingly” (vol. 1, p. 519). The eventual result of this adjustment, as 


208 AGREEMENTS IN THE AMERICAN-WEST INDIAN TRADE. 

pointed out by Mr. Beck, is that the lines have the same rates be¬ 
tween New York and Santiago, both southbound and northbound, 
although at times one might be underquoting the other, not having 
knowledge of what the other was doing (vol. 1, p. 519). 

The Caribbean Conference .—It may be added here that 
nearly all the New York lines operating to and from the Caribbean 
district, namely the New York & Cuba Mail Line, Munson Line, 
Hamburg-American Line, Royal Mail Steam Packet Co., Red “ D ” 
Line, United Fruit Co., Clyde Line, New York & Porto Rico Steam¬ 
ship Co., and others, are members of the so-called Caribbean Con¬ 
ference. This conference (testimony of C. J. Beck, vol. 1, p. 538) is 
composed of New York lines only. No qualifications for membership 
are required and every line in the trade is said to have been invited to 
join. With respect to the Panama Railroad Steamship Co., how¬ 
ever, Mr. Gottheil testified: 

The Panama R. R. Steamship Co. stated that owing to its company being a 
branch of the United States Government they could not consistently become a 
member of the proposed conference; but that they were willing to attend the 
conference meetings, and would no doubt be glad to follow the conference. I 
want to show that foreign lines are not the only ones that do this sort of thing; 
and that the American lines oftentimes find it necessary to adopt these means 
(conferences), including the Government (voh 1, p. 322). 

All the witnesses before the Committee representing interested 
lines contended that this conference exists solely for the purpose of 
improving the manner of handling the trade, and has nothing what¬ 
ever to do with the fixing and maintenance of rates, the division of 
ports and the regulation of competition between the lines. Its object 
is to secure cooperation in matters that are non-competitive, such as 
questions of exchange, the improvement in the form of bills of lading, 
and other routine matters pertaining to the general conduct of the 
business. In fact, Mr. Beck asserted that the lines belonging to the 
conference might be fighting each other in rates and at the same time 
be able to agree on those matters over which the conference has 
jurisdiction (vol. 1, p. 538). 

2. Lines between North Atlantic ports., other than New York., and 
Cuba :— 

With the exception of the New York lines, only two regular 
lines operate to Cuba from Atlantic ports of the United States, 
viz., the Munson Line from Baltimore, and the Boston & Havana 


AGREEMENTS IN THE AMERICAN-WEST INDIAN TRADE. 209 

Steamship Co. (for which the Munson Line acts as agent) from 
Boston. Mr. C. B. Kellogg, General Freight Agent of the Munson 
Line, explained that, although no understanding or agreement what¬ 
soever exists between the Munson Line and the New York & Cuba 
Mail with reference to rates or the division of ports, the Munson 
Line attempts to make the rates from Baltimore to Havana the 
same as from New York. The rates from Boston to Havana are also 
based upon the New York rates, and the typewritten list of rates 
furnished to the Committee, in response to its request for the cur¬ 
rent rates, under date of October 26, 1912, by the Boston & Havana 
Steamship Co. contains the statement that the ‘‘ rates are intended 
to be the same as the rates from New York.” With reference to 
the relations between his line and the New York & Cuba Mail Line, 
Mr. Kellogg explained that “ we would answer their questions about 
rates, and would expect them to answer ours.” In reply to the 
question: “ and there is no amicable arrangement between the two 
companies that will avoid competition between the two lines ? ” Mr. 
Kellogg answered, “ not of necessity; there is simply the arrange¬ 
ment as a matter of business policy of talking over with one another 
what the rates might be” (vol. 1, p. 657). 

3. Lines operating between Gulf ports and Cuba — The Gulf 
Foreign Freight Committee :— 

The several lines operating services between Gulf ports of the 
United States and Cuba—the Munson Line from Mobile, the South¬ 
ern Pacific Co.’s “ New Orleans-Havana Line ” and the United 
Steamship Co., from New Orleans and Galveston, the Peninsular & 
Occidental Steamship Co. (owned jointly by the Florida East Coast 
Ry. and the Atlantic Coast Line R. R.) from Tampa and Key 
West, and the Tussco Line (the United States Shipping Co., oper¬ 
ating time-chartered boats from any port where business may be 
secured)—are members of the Gulf Foreign Freight Committee. 
Copies of “Freight Tariff No. 1009-B (Gulf Foreign Freight Com¬ 
mittee lines),” effective May 15, 1912, and issued by W. H. Hosmer, 
Agent, were furnished to the committee by several of the lines, and 
the title page contained the names of all the aforementioned lines. 
This tariff contains the class and commodity rates on shipments from 
Key West, Mobile, New Orleans and Galveston to Havana and Cuban 
outports (rates to the outports being arrived at by an established set 
25655“— VOL 4—14-14 



210 AGREEMENTS IN THE AMERICAN-WEST INDIAN TRADE. 

of arbitraries contained in the tariff) and is governed, except as 
otherwise provided therein, by F. H. Holbrook’s Official Classifica¬ 
tion No. 38 and supplements thereto and reissues thereof. “ Freight 
Tariff No. 1000-A (Gulf Foreign Freight Committee),” was also 
submitted^ containing rates from Havana and Cuban outports to 
Mobile, New Orleans and Galveston, effective May 1, 1912, and con¬ 
taining on the title page the names of the Southern Pacific Co.’s 
“ New Orleans-Havana Line,” the Munson Line and the United 
Steamship Co. The United Steamship Co., for example, in its re¬ 
plies to the Committee’s Schedule of Inquiries, states that it is not 
a party to any agreement or understanding with the other steamship 
Hnes “except that we protect Tariffs Nos. 1000-A and 1009-B on 
commodities named therein, these rates at any time, however, being 
subject to independent notice to the contrary.” 

Nearly all of the freight of the lines operating from Gulf ports 
to Cuba is through traffic from the interior. Originally these lines 
made the rates in conjunction with the railroads on a pro-rata basis, 
and continued to file tariffs with the Interstate Commerce Commis¬ 
sion until the courts ruled that Cuba was not a country adjacent to 
the United States, and did not come within the meaning of Section 1 
of the Act to Eegulate Commerce (vol. 1, pp. 662, 663). Following 
this decision the steamship lines made independent rates from the 
Gulf to Cuba. The rates continued, however, to be made by the 
same committee that made them previously, although the railroads 
no longer exercised any influence over the steamship rates (vol. 1, 
p. 663). In other words the rates are now made by the steamship 
lines represented in the conference (the railroads concerning them¬ 
selves only with the export rates for the rail haul, and the steamship 
lines with the rates from Gulf ports to Cuba), and are published by 
the Gulf Foreign Freight Committee as a committee (vol 1, p. 664). 

In explaining the purpose of the Gulf Foreign Freight Committee, 
Mr. Chester B. Kellogg asserted that it was of exactly the same nature 
as a railroad traffic association; that each of the conference lines 
names, independently, the rates that appear in the joint tariff pub¬ 
lished by the committee from the several Gulf ports; that each of the 
lines is absolutely independent in the naming of rates and can declare 
an independent rate at any time; that any line desiring to change its 
rates sends an announcement of its intention to the chairman of the 
committee, and the proposed changes are then discussed by the 


AGREEMENTS IN THE AMERICAN-WEST INDIAN TRADE. 211 

representatives of the lines at a meeting of the committee; and that 
the rates thus arrived at are issued by an agent representing the sev¬ 
eral lines—Mr. W. H. Hosmer, of Chicago—in the form of a joint 
freight tariff, to which supplements are issued from time to time 
(vol. 1, pp. 662, 665, 666, 667 and 671). But with respect to the 
issuance of this joint tariff the steamship interests want it clearly 
understood that each line independently directs the agent what the 
rates shall be. The lines may depart from these rates by notifying 
the chairman of the committee, but no rates are cut without such 
notification (vol. 1, pp. 666, 668). 

The purpose of the conference, Mr. Kellogg stated, is “to talk 
over what would be a legitimate and fair rate for the business from 
the different ports ” so that shippers at one port can not be quoted a 
rate which will bring in competition and concentrate the traffic there 
as compared with other ports (vol. 1, p. 667). Moreover, as a gen¬ 
eral rule, the lines do not give their notice of changed rates to the 
chairman until after the conference meeting, and, to quote Mr. Kel- 
logg, “We have to be in agreement when the conference is over” 
(vol. 1, p. 668). He testified that “naturally the object of the oral 
agreement is that we will know what is going on”; that “we are 
trying to keep ourselves from destroying each other” (vol. 1, p. 
670); and that the rates, as contained in the joint tariff, are main¬ 
tained by the lines at present (vol. 1, p. 671). 

It may be added that the rates from New York are about the same 
as those from the Gulf ports (vol. 1, p. 662), and that in the case of 
most articles it would be impossible for the Gulf ports to enjoy a 
differential, since the Atlantic lines would meet the rates. It may 
be repeated that the New York and Cuba Mail Line, the principal line 
from New York, is a member of the Gulf Foreign Freight Com¬ 
mittee for the purpose, as stated by the Management of the line, that 
“we may obtain information as to the freight rates from the Mis¬ 
sissippi Valley to the seaboard and from the Gulf to Cuban ports, 
in order to enable us to meet their competition.” Only in the case 
of grain and packing-house products, because of the greater nearness 
to the territory producing the same, do the Gulf lines probably make 
the rates, the same being followed by the New York lines with a view 
to developing trade from their territory (vol. 1, p. 662). Mr. Kel¬ 
logg also declared that, all factors considered, the rates from the 


212 AGREEMENTS IN THE AMERICAN-WEST INDIAN TRADE. 

United States to Cuba are about the same as those from Europe 
(vol. 1, p. 675). 

Agreements in the Trade Between the United States and Haiti and Santo 

Domingo. 

Enuntberation of Services. —Three lines control the trade between 
the United States and Haiti, viz., the Atlas Service of the Hamburg- 
American Line, the Royal Dutch West India Mail Line, (both oper¬ 
ating to and from New York, and including Haiti in their New 
York-Colombian and New York-Venezuelan services, respectively), 
and the Seeberg Line from Mobile, the last named being the only 
line from a southern port. The Clyde Line, on the other hand, is 
the only line serving the ports of Santo Domingo. Its vessels never 
call at the neighboring ports of Haiti, nor do the steamers of the 
Hamburg-American and Dutch Lines, serving Haitian ports, ever 
call at the ports of Santo Domingo. 

This apparent division of territory, by which the Clyde Line en¬ 
joys a monopoly of the American-Santo Domingan trade, does not 
exist by virtue of any agreement or understanding between any of 
the lines. This is shown by the testimony of Messrs. C. J. Beck, 
Freight Traffic Manager of the Hamburg-American Line (vol. 1, 
p. 523), F. D. Mooney, General Manager of the Clyde Line (vol. 1, 
p. 645), and Paul Gottheil, representing the Royal Dutch West India 
Mail Line (vol. 1, pp. 320, 321). Mr. Gottheil’s testimony, in par¬ 
ticular, shows that the policy of the lines not to infringe upon each 
other’s territory is due to a mutual desire to avoid a rate war in a 
trade which for some years has been conducted peacefully and satis¬ 
factorily to all parties (vol. 1, pp. 320, 321). 

Agreement (terminated Dec. 31^ 1912) between the Bamburg- 
American Line and the Royal Dutch West India Mail Line for the 
regulation of the Haitian trade to and from New York. _Until De¬ 

cember 31,1912, the two lines now connecting the ports of Haiti with 
New York were parties to a pooling agreement which went into effect 
on January 1, 1910, for a period of one year, and to continue there¬ 
after from year to year unless terminated by six months’ notice from 
either party. This agreement had for its purpose the division of 
ports in Haiti between the lines, the fixing and maintenance of freight 
and passenger rates, and the pooling of a certain proportion of the 


AGREEMENTS IN THE AMERICAN-WEST INDIAN TRADE. 213 

earnings. With respect to each of these essential purposes, the agree¬ 
ment contained the following stipulations: 

(1) In the trade from New York to Haiti the ports of 
Gonaives, Miragoane, Port de Paix, and Haiti were reserved to the 
Hamburg-American Line, and the ports of St. Marc, Aux Cayes, 
Aquin, and Jacmel to the Royal Dutch West India Mail Line. Cer¬ 
tain ports, however, viz., Port au Prince, Petit Goave and Jeremie 
could be served jointly by both lines. Similarly in the voyage to 
New York certain ports were reserved to each of the lines, while 
others could be served jointly. On cargo from or to Europe, how¬ 
ever, either directly or via New York, each line was entitled to retain 
the entire through freight. 

(2) Each line reserved for itself 40 per cent of its net 
freight, as computed according to the terms of the agreement, and 
the remaining 60 per cent was to be pooled and divided in the pro¬ 
portions of 76.75 per cent to the Hamburg-American Line, and 23.25 
per cent to the Royal Dutch West India Mail Line. These propor¬ 
tions of the pool were based upon a minimum of 26 sailings per year 
for each of the lines, and upon the actual earnings of the two lines 
from New York to Port au Prince and Petit Goave during the years 
1907,1908 and 1909, and later divisions were to be based always upon 
the earnings of the last three years. A settlement of the pooling 
account was to be made semi-annually, and in case either line should 
fail to supply the stipulated minimum number of sailings in any 
year to the pooled ports, that line’s share in the pool earnings was to 
be reduced proportionately for the benefit of the other party. 

(3) Both lines agreed to maintain the same rates between 
Haiti and New York as regards all ports, and also the same through 
rates between Haiti and Europe, either for shipments via New York 
or for direct shipments from Haiti. The tariffs agreed upon were to 
be strictly observed and all reductions, either direct or indirect, by 
giving commissions or other advantages, were prohibited. Pas¬ 
senger rates, and uniform commissions to agents were also agreed 
upon. 

(4) All matters of dispute arising under the agreement 
were to be submitted for arbitration to three disinterested persons 
residing in New York (none of them to be lawyers), whose decision 
was to be binding upon the parties. 


214 AGREEMENTS IN THE AMERICAN-WEST INDIAN TRADE. 

Although this agreement was discontinued on December 21, 1912, 
Mr. Beck testified (vol. 1, p. 523) that as far as the freight traffic is 
concerned both lines continue to observe the same rates and condi¬ 
tions. No regular conferences are held, but if business matters of 
importance arise the lines consult each other about the same. A com¬ 
parison of the Hamburg-American Line’s Freight Tariff No. 2, and 
the Royal Dutch West India Mail Line’s Freight Tariff No. 1, both 
issued April 1, 1912, and furnished by the lines at the Committee’s 
request for the current rates, show that the rates from New York to 
Haiti and vice versa are the same for both lines. Mr. Gottheil tes¬ 
tified (vol. 1, p. 320) that these tariffs are made by the New York 
representatives, and that at present there is only an agreement to 
maintain the same rates; while Mr. Beck asserted (vol. 1, pp. 536, 
537) that the rates are alike to all shippers, irrespective of the quan¬ 
tity shipped, with the exception of a special rate occasionally 
granted to contractors with a view to encouraging undertakings for 
the upbuilding of Haiti’s trade. 

Agreement between the Hamburg-American Line and the Royal 
Mail Steam Packet Go. with respect to Haiti. —In addition to the 
agreement with the Royal Dutch West India Mail Line, the Ham¬ 
burg-American Line has an agreement with the Royal Mail Steam 
Packet Co., whereby the latter company agrees not to extend its 
service to Haitian ports as far as sailings to and from New York 
are concerned. Section 5 of the agreement of February 21, 1908, 
which, as already explained, governs the traffic of the two lines be¬ 
tween New York and the entire Caribbean district, provides that: 

The Royal Mail Steam Packet Co. bind themselves not to extend their 
services to Haitian ports and Santa Marta, as far as sailings to and from New 
York are concerned, except that in case of war with the Royal Dutch West 
India Mail Line the Royal Mail Steam Packet Co. shall have the privilege of 
calling at Haitian ports served by the Dutch Line. (See sec. 5, vol. 1, p. 525.) 

Agreement in the Trade Between the United States and Jamaica. 

Regular line service between ports of the United States and 
Jamaica is'furnished by the following lines: (1) from New York, 
the Hamburg-American Line, the Royal Mail Steam Packet Co., 
the United Fruit Co., and the Atlantic Fruit & Steamship Co.; (2) 
from Philadelphia and Baltimore, the United Fruit Co. and the 
Atlantic Fruit & Steamship Co.; and (3) from Gulf ports, the See- 


AGREEMENTS IN THE AMERICAN-WEST INDIAN TRADE. 215 

berg Line from Mobile and the United Steamship Co. from New 
Orleans and Galveston. Of the above lines the Atlantic Fruit & 
Steamship Co. competes with the United Fruit Co. and the New 
York lines only as regards shipments to two commercial houses on 
the north side of Jamaica (testimony of Joseph Di Giorgio, vol. 2, 
p. 796), and the Seeberg Line and United Steamship Co. are the only 
lines operating from their respective Gulf ports to Jamaica. Ac¬ 
cording to Mr. Boissevain (vol. 2, p. 750), however, the fortnightly 
service of the first line from Mobile competes with the New York 
lines in that it quotes lower rates from its port than do the lines 
from New York. 

Of the three principal New York lines, the Hamburg-American 
Line and the Koyal Mail Steam Packet Co. are again governed in 
their Jamaican trade, both northbound and southbound, by the 
agreements of February 21,1908 and October 7,1908; and the United 
Fruit Co., while it is not a party to these or any other written agree¬ 
ments with the Hamburg-American and Royal Mail Lines, never¬ 
theless, according to a tacit understanding as regards the entire 
Caribbean district, observes the same rates as the other lines (vol. 2, 
p. 747). Since the essential features of the relations between these 
lines in the Caribbean trade have been previously explained,^ it need 
only be stated with special reference to Jamaica that, besides agree¬ 
ing upon the freight rates and passenger fares to and from Jamaica, 
the Hamburg-American and Royal Mail Lines allow a deferred 
rebate of 10 per cent, computed for every six months’ shipments and 
payable six months thereafter, provided the shipper has supported 
only the lines which are parties to the above-mentioned agreement. 
This deferred rebate allowance is granted only on shipments from 
New York to Kingston, Jamaica, and not, according to the agree¬ 
ment, on shipments from New York to Jamaican outports or on ship¬ 
ments from Jamaica to New York (vol. 1, p. 527). In a letter from 
Mr. William H. Douglas, President of Arkell & Douglas (Inc.), 
under date of January 9, 1913, the Committee is advised that his 
firm also receives the same rebate allowance of 10 per cent from the 
United Fruit Co. that is paid by the Hamburg-American and Royal 
Mail Lines on shipments from New York to Kingston (vol. 1, p. 

»See p. 194 of the chapter dealing with “Agreements in the American-Mexican and 
Central American Trade,” and pp. 176-180 of the chapter on “Agreements in the trade 
between the United States and South America.” 




216 AGREEMENTS IN THE AMERICAN-WEST INDIAN TRADE. 

119). Mention might also be made here of the report of Mr. J. D. 
Dreher, American Consul at Port Antonio, Jamaica, under date of 
January 10, 1913, to the effect that “ some months ago all the ship¬ 
ping companies carrying freight between Jamaican and American 
and British ports agreed upon uniform rates, the rates being the 
same between Jamaica and these two countries. At the same time 
the freight charges were increased to such an extent that merchants 
have informed me that the reduction of the ad valorem customs 
duties in Jamaica from 16f to 10 per cent has been offset in nearly 
all goods by the increased freight rates” (vol. 3, p. 289). 

In view of the application to the entire Caribbean district of 
the agreements of February 21 and October 7, 1908, between 
the Hamburg-American and Royal Mail Lines, and the tacit 
understanding between these lines and the United Fruit Co., a 
brief explanation of how the three lines came to cooperate with each 
other in this field will not be out of place. About 13 years ago (testi¬ 
mony of W. G. Sickel, vol. 1, p. 643) the Atlas Service, at that time 
an English corporation, was the only regular line serving the Carib¬ 
bean district from the United States, its service being antiquated and 
its policy unprogressive. About this time the service was purchased 
by the Hamburg-American Line, which, in its efforts to improve the 
service and build up commerce, offered facilities which exceeded 
the immediate needs of the trade, and involved the line in a loss. 
When, after about five years of pioneer work, the service began to 
show profits, the Royal Mail determined to compete with the Atlas 
Service by extending its European-West Indian service to New York, 
thus again causing the trade to be greatly overtonnaged. The Royal 
Mails’ entry into the trade was resented by the Atlas Service, and a 
two years’ rate war resulted. Both lines being powerful, and neither 
succeeding in eliminating the other, the natural result was the dis¬ 
continuance of the warfare by concluding the agreements already 
discussed. But before arriving at an agreement the overtonnaged 
condition of the trade caused each of the lines to secure traffic by 
secret arrangements or otherwise. As Mr. Sickel so vividly de¬ 
scribed the situation to the Committee (vol. 1, p. 544): 

Having no understanding with them and wishing to protect ourselves, we 
would go to a shipper and make some secret arrangement with him. Such 
things can not be kept private for long and the Royal Mail did the same thing, 
with the result that, when we came to an agreement and each of us tabled our 


AGREEMENTS IN THE AMERICAN-WEST INDIAN TRADE. 217 

secret contracts, it was most surprising to see how, unconsciously, we had been 
unjust to many shippers by giving some of them preferential rates. If both of 
us had been determined to annihilate the other, and, for the sake of argument, 
one had been driven out of the trade, would it not have automatically created a 
monopoly? Because, if one strong line could drive another strong line out of 
the trade, it would be a bad trade for any weak competitor to venture into in the 
future. Unrestricted competition based on the law of the survival of the fittest 
must in the end result in monopoly. After we came to our agreement with 
the Royal Mail and all secret arrangements with shippers had been canceled or 
expired, every shipper was on an equal plane with others and discriminations 

had ceased. The natural question that you will ask is that, alter we had come 
to our agreement, what was to prevent our putting the rates to a basis that 
would be exorbitant? There would be nothing to prevent this, except, if we 
had followed such a policy, which we did not do, the two partners in the trade 
would be subject to the same discriminatory measures of competition as we 
suffered at the hands of the Royal Mail. 

Following the agreement between the Atlas Service and the Eoyal 
Mail, and at just about the time when the trade had grown sufficiently 
to enable the two lines to profitably live alongside of each other, the 
United Fruit Co. decided to enter the field and to handle passengers 
and general merchandise in addition to its own very extensive fruit 
business. The United Fruit Co.’s entry into the Caribbean trade 
again meant, temporarily at least, a supply of steamers beyond that 
justified by the trade. Instead of having a second disastrous rate 
war, however, the two lines already in the field adjudged the new¬ 
comer to be a powerful organization with ample experience in the 
handling of steamers, and, accordingly, as stated by Mr. Sickel, “ the 
Eoyal Mail and* ourselves, as partners in the trade, admitted them 
without a protest, because both of us saw the fallacy of attempting 
to fight an organization of their experience and resources. The Eoyal 
Mail and ourselves have no agreements with the United Fruit Co., 
although we all three work in cooperation, but the fact remains that, 
with three large prominent lines serving the trade, there are more 
steamers than there is business.” The present gentlemen’s under¬ 
standing between the lines was justified by Mr. Sickel in the follow¬ 
ing statement (vol. 1, pp. 544, 545): 

Suppose, for instance, we did not work under some kind of gentlemen’s 
agreement? The trade would soon be in a chaotic condition such as it was 
during our fight with the Royal Mail; and if the three of us engaged in a 
three-cornered fight, some one of us, or maybe two of us, would either drop out 
of the trade altogether or restrict our tonnage, and while shippers might have 


218 AGEEEMENTS IN THE AMERICAN-WEST INDIAN TRADE. 

■ very low rates, they would not have the facilities to move their cargo, for it 
can not be denied that a long, hard fight among two or more ocean trans¬ 
portation companies does not expand but tends to restrict the development of 
those lines, which places our exporter at a disadvantage in competing in the 
world’s markets. My years of experience have shown to me that shippers do 
not as a rule object to the friendly agreements existing between lines for the 
maintenance of rates. On the contrary, they are assured that these agreements 
prevent discrimination. All they ask is that the rates be made reasonable 
enough to allow them to sell in competition with the foreign producer. 

Agreement Between the Lines Operating To and From Trinidad. 

Enumeration of lines in the trade. —The only lines maintaining a 
schedule of regular sailings between New York and Trinidad are the 
Royal Dutch West India Mail Line, Royal Mail Steam Packet Co., 
Lamport & Holt Line, and the Trinidad Shipping & Trading Co. 
The Hamburg-American Line, in its pooling agreement of February 
21,1908, with the Royal Mail Steam Packet Co., obligated itself “ not 
to call at Trinidad and Grenada from and to New York, excepting 
with its cruising steamers ” (.sec. 6; see vol. 1, p. 526). 

Deferred rebate agreement in the northbound trade. —With a view 
to preventing competition on the part of tramp steamers, which at 
irregular intervals call at Trinidad chiefly to obtain coal, and at such 
times offer to carry cargo at rates far below those which the lines 
could profitably accept and continue their regular service, all of the 
lines operating between Trinidad and New York are parties to an 
agreement, having for its purpose the maintenance of freight rates 
in the northbound voyage and the allowance of a deferred rebate on 
cocoa, the principal item of export to New York. According to the 
deferred rebate circular issued to shippers by the four lines (for a 
copy see vol. 3, p. 249), a deferred rebate of 10 per cent is allowed on 
all shipments of cocoa, the same being computed for a fixed period 
of six months on the basis of an agreed rate (mentioned in the cir¬ 
cular) and paid six months thereafter. In his rebate declaration the 
shipper declares that “neither during the period named nor since 
have we made or been interested, directly or indirectly, either as prin¬ 
cipals or as agents, in any shipment {sugar and asphalt excepted) 
from Trinidad to New York, either direct or by transshipment by 
any vessels other than those provided by the four lines parties to the 
agreement.” 


AGREEMENTS IN THE AMERICAN-WEST INDIAN TRADE. 219 

Maintenance of rates both northbound and southbound. —Between 
Trinidad and New York the aforementioned four lines maintain 
the same rates in both directions. Northbound the lines operate 
under a joint freight tariff signed by all the lines (vol. 3, pp. 248, 
249). Southbound, the Committee is advised that the lines issued to 
shippers in 1912 a notice of a revised tariff of freight rates (to go 
into effect November 1, 1912) applying to, all foodstuff and general 
merchandise from New York to Trinidad via all the lines (vol. 3, 
pp. 251, 252). 

Traffic To and Prom Martinique, Guadeloupe, and Barbados. 

Lines to Guadeloupe and Martinique. —Three lines connect these 
islands with American ports, viz., the Quebec Steamship Co. (with a 
fortnightly service), the New York & Demerara Steamship Co. 
(with sailings only about every five weeks) from New York, and the 
Seeberg Steamship Line from Mobile. Of the two New York lines 
the Quebec Steamship Co. is by far the most important, Messrs. L. W. 
& P. Armstrong, agents of the New York & Demerara Line, having 
advised the Committee under date of October 3, 1912, that their line 
is essentially a private carrier; that practically all the freight car¬ 
ried by their steamers is their own property; that they only solicit 
freight from outsiders when they have space to spare; and that in 
order to secure the same they have no hesitation in reducing their 
rates. 

Practices of the Quebec Steamship Co. in the trade to Guadeloupe 
and Martinique—Contracts with shippers and the allowance of re¬ 
bates. —None of the above lines have answered the Committee’s 
Schedule of Inquiries. In a letter dated May 9, 1913, however, Mr. 
A. E. Outerbridge, representing the Quebec Steamship Co., informed 
the Committee that in the trade between New York and Guadeloupe 
and Martinique the line has arranged the ultimate rate of freight on 
a sliding scale, based upon the quantity shipped. Since the total 
quantity transported can not be ascertained in advance, an adjust¬ 
ment is made at the end of every six months for the purpose of allow¬ 
ing the shipper a refund on the rates paid when the freight was 
offered for shipment. This rebate is granted in order to make the 
final rate proportionate to the total quantity transported, and is not 


220 AGKEEMENTS IN THE AMERICAN-WEST INDIAN TRADE. 

a “ deferred rebate ” except for the purpose of computing the volume 
of freight upon which the rate is based (vol. 2, p. 1391). 

The line seeks to protect its interests by making contracts with 
shippers in the trade, such contracts having been accepted by mer¬ 
chants who have freight to send in considerable quantities. The 
shipper, according to this contract^ obligates himself to ship all 
freight, (except coal and superphosphates) from New York to 
Guadeloupe and Martinique, in which he may be interested, directly 
or indirectly, by the steamers of the Quebec Steamship Co., to the 
exclusion of all other steamers or sailing vessels. In turn the line 
guarantees at least two sailings per month, but is not obliged to send 
more than one steamer monthly to Basse Terre (Guadeloupe), and 
none at all for less than 1,000 barrels at the 60-cent rate. The ship¬ 
per also guarantees to the line a stipulated minimum quantity of 
cargo per annum to Martinique, and a separately stated quantity to 
Guadeloupe. 

Failure to ship the quantity guaranteed to either one of the islands 
will not operate against the rebate on freight to the other island, 
but failure to ship the agreed quantity to either or both islands will 
affect the rebate paid. This rebate, representing the difference be¬ 
tween freight paid at the time of shipment and the actual freight as 
computed on the basis of the quantity shipped, will be paid every six 
months (there being no term of deferment), but only on the condition 
that the shipper has faithfully carried out all the terms of the agree¬ 
ment, pertaining to the minimum quantity of cargo to be sent, the 
shipment of all freight by the line to the exclusion of all other car¬ 
riers, etc. The rebate allowed in case shipments equal the guaranteed 
minimum quantity is 10 cents per barrel, but if the minimum guaran¬ 
teed is not shipped, the rebate paid will be based upon the percentage 
the quantity shipped bears to the minimum guaranteed. In case the 
shipments exceed the minimum, an additional 6 cents per barrel is 
paid on any surplus, not exceeding 10,000 barrels in all. The line, 
however, need not pay a rebate which would reduce the net amount 
of freight below the 20-cent tariff, a provision introduced for the 
protection of the line in the event of opposition by outside steamers 
or sailing vessels. Nor are any rebates to be paid on lumber, shooks, 

1 For a sample see the contract between Messrs. A. E. Outerbridge & Co., agents of the 
Quebec Steamship Co. (Ltd.), and Messrs. A. D. Strauss & Co., of New York (toI. 1, pp. 
1392-1393). 




AGREEMENTS IN THE AMERICAN-WEST INDIAN TRADE. 221 

staves or fertilizers, which are taken at special rates, but it should 
be especially noted that ‘‘ the quantity of such freight will he included 
in making up the minimum.’^'' Lastly, besides agreeing to arbitrate 
all disputes arising under this contract, the shipper agrees “ not to 
give any portion of the rebate he receives from the line to any client 
in Martinique-or Guadeloupe who shall import any freight from New 
York by any" other vessels than those of the Quebec Steamship Co.” 

That all shippers are not in accord with the foregoing contract 
is well illustrated by the complaint filed by Messrs. A. D. Strauss & 
Co. They state that they are parties to the contract “ ffom com¬ 
pulsion rather than from choice ” and that “ since the beginning of 
the agitation about rebates and conference lines, we came to the con¬ 
clusion that such arrangements are unlawful, that we can not accept 
refunds without laying ourselves open to a charge of breaking the 
laws, and we have notified Messrs. Outerbridge & Co. that these 
contracts must be abolished, while at the same time we have refused 
to accept a rebate” (vol. 2, p. 1396). Rates, they claim, should be 
uniform to all shippers, whereas the contract, according to their 
viewpoint, plainly sets forth its object to stifle competition, espe¬ 
cially since “ the contract operates in favor of one shipper.” In 
this connection special attention is directed to the clause which de¬ 
clares that shipments of staves, lumber, and estate stores shall not 
participate in the refund, but are to ‘‘ be figured as forming part of 
the bulk of freight upon which the refund is payable and earned.” 
Since these goods, it is asserted, “ form nearly one-half of the Mar¬ 
tinique and Guadeloupe freights, it is seen that the shipper of these 
goods receives upon the general merchandise a refund far in excess 
of what any other shippers receive, and they therefore easily suc¬ 
ceed in killing our and other merchants’ Martinique and Guadeloupe 
trade” (vol. 2, p. 1896). 

On the other hand, the representatives of the Quebec Steamship 
Co. contend that these contracts in the West Indian trade were the 
outcome of several meetings with various firms in the trade, and 
that they were originally entered into for the protection of both 
shippers and regular steamship owners from the attacks of sporadic 
tramps. It is charged that during times of dullness in the freighting 
business, tramp steamers would offer to carry cargo at very low 
rates “ to the injury of a large number of small importers in the 


222 AOEEEMENTS IN THE AMEKICAN-WEST INDIAN TRADE. 

West Indies who are dependent upon the regular transportation 
lines for their little supplies, and also to the injury of the regular 
steamship owners” (vol. 2, p. 1391). 

Rebate system in the New York—Bermuda trade similar to that 
'prevailing in the New York—Martinique and Guadeloupe trade ,— 
It may be added here that in the New York-Bermuda trade, where 
the service is conducted by the Quebec Steamship Line, the Royal 
Mail Steam Packet Co. and the Bermuda Atlantic Steamship Co., 
the first two lines are parties to an arrangement for the payment of 
a sliding scale of rebates on shipments from New York, similar to 
those just explained for the trade between New York and Martinique 
and Guadeloupe. These rebates, it should be noted, are paid an¬ 
nually to importers in Bermuda on all freight imported during the 
year from New York by steamers of the Quebec Steamship Co. and 
the Royal Mail Steam Packet Co., and only on the condition that 
no importations have been made, either directly or indirectly, by 
vessels other than the steamers of the two lines.^ As in the Mar¬ 
tinique and Guadeloupe trade, these rebates are not deferred except 
for the purpose of computing the annual quantity of the freight. If 
the freight paid amounts to $100 and less than $1,000, the rebate is 
10 per cent; if amounting to $1,000 and less than $1,500, 15 per cent; 
and if amounting to $1,500 or over, 20 per cent. No rebates are paid 
on through freight from England, Canada or other ports unless 
paying New York tariff rates. Nor have any rebates been allowed 
for many years on freight from Bermuda to New York, consisting 
entirely of perishable commodities shipped between December and 
June, and controlled principally by about half a dozen commission 
merchants in New York City (vol. 2, p. 1391). 

The data furnished to the Committee by the Management of the 
Quebec Steamship Co., shows that for the year 1912, 15 persons re¬ 
ceived the 20 per cent rebate, 10 the 15 per cent rebate, and 85 the 
10 per cent rebate. These figures were furnished to demonstrate that 
the trade to Bermuda is by no means monopolized by the large mer¬ 
chants, but that instead the number of small shippers has greatly in¬ 
creased when the figures of 1912 are compared with those of former 


1 For a copy of the circular announcing the system of rebates granted by the Quebec 
Steamship Co. and the Royal Mail Steam Packet Co., in the New York-Bermuda trade, see 
vol. 1, p. 1392. 



AGREEMENTS IN THE AMERICAN-WEST INDIAN TRADE. 223 


years ^ (vol. 2, p. 1394). In support of the graded scale system of 
rates the management argues that: 

We feel sure that while the sliding scale of rebates controls the trade, it at 
the same time metes out to each trader a rate proportionate to his business 
energy and enterprise. ♦ ♦ ♦ Remove the rebates or establish a common 

one to all, irrespective of volume of importation, and the large dealer will be 
driven to some means of placing himself at an advantage, which he will secure 
by taking every opportunity from November to May of either individually or 
in combination arranging for independent transportation; the result would be 
that their stocks would be placed at charges lower than the small trader could 
secure, and it would follow that the latter would not only be damaged, but the 
regular lines would be driven to meet the conditions by temporary reductions. 
That doubtless w^ould outweigh any advantages gained by the temporary 
changes now proposed. While we quite appreciate that elsewhere rebates are 
injurious, we are convinced that with us, under the arrangements that now 
exist, they are fair and above board; we have no personal interest in the matter 
beyond the parties we represent, and our opinions are advanced honestly with 
that view. 

Lines to and from Barbados. —According to the American 
Exporters’ Export Trade Directory five lines connect ports of the 
United States with Barbados, viz, the Quebec and New York & 
Demerara Steamship Cos. (in connection with their Guadeloupe, 
Martinique and Demerara service); the Koyal Mail Steam Packet 
and Royal Dutch West India Mail Lines (in connection with their 
service to Trinidad) from New York; and the Seeberg Line from 
Mobile. From Mr. Lorenzo Daniel’s testimony it would also appear 
that the Lamport & Holt and Booth Lines touch at Barbados in their 
New York trade. 

Relationship between the lines in the Barbados trade. —None of 

# 

the above lines have answered the Committee’s Schedule of Inquiries. 


1 That data is presented in vol. 1, p. 1394, and shows that during the years 1906-1912, 
inclusive, the following number of persons received the three grades of rebates : 


Years. 

20 per 
cent. 

Persons. 

15 per 
cent. 

10 per 
cent. 


12 

6 

67 


12 

8 

61 


10 

5 

69 


7 

12 

56 


4 

4 

47 


12 

9 

72 


15 

10 

85 

























224 AGREEMENTS IN THE AMERICAN-WEST INDIAN TRADE. 

and it has therefore not been possible to determine definitely 
whether the freight traffic of the New York lines is governed by 
any rate understanding. Mention, however, has already been made 
of the fact that the New York & Demerara Steamship Co. is princi¬ 
pally a private carrier, and that the Royal Mail and Royal Dutch 
Lines are parties to an agreement governing the trade between New 
York and Trinidad in both directions. That the important lines, at 
least, are not antagonistic to each other would seem to be indicated 
by an oral passenger-rate agreement relative to Barbados between 
the Quebec Steamship Co., the Royal Dutch West India Mail Line, 
the Lamport & Holt Line and the Booth Line (testimony of Lorenzo 
Daniels, vol. 1, pp. 172 and 629). All arrangements under this 
agreement are effected by an exchange of letters between the lines, 
and judging from one of the letters, addressed by Messrs. A. E. 
Outerbridge & Co. (representing the Quebec Steamship Co.) to the 
agents of the Lamport & Holt Line, the agreement has for its purpose 
the fixing and maintenance of all passenger rates to and from the 
West Indies” (vol. 1, p. 629). Whatever the exact relations between 
the lines as regards the freight traffic may be, Mr. C. W. Martin, 
American Consul at Barbados, reported to the Committee that “ while 
much has been written about the advantage of the European over the 
American exporter in the matter of ocean rates, an investigation in 
Barbados shows that the advantage is with the American exporters 
in rates as well as distance and time.” The rates on leading articles 
of export, as furnished in Mr. Martin’s report, show that the rates 
from New York to Barbados are on the average from 30 to 50 per 
cent lower than the rates from European ports. 

Messrs. R. D. Strauss & Co. in their communication to the Com¬ 
mittee under date of May 5, 1913, (already referred to in connec¬ 
tion with the trade to Guadeloupe and Martinique) state that the 
Quebec Steamship Co. was the first to start a service to the chain 
of islands forming the eastern boundary of the Caribbean Sea, and 
that for a period of 25 years all competitive lines attracted to the 
trade were driven out by-the Quebec Line’s merciless competition. 
But about five years ago, according to this account, the Dutch 
Government offered a large subsidy to a line of steamers built for 
the fruit-carrying trade and intended on the outward trip to stop 
at Barbados, Trinidad, Demerara and Surinam. These steamers 


AGREEMENTS IN THE AMERICAN-WEST INDIAN TRADE. 225 

were of such superior character as to justify the belief that they 
would acquire the control of the business. The communication then 
continues with the following account: 

Messrs. Outerbridge & Co., confronted by a line which they could not drive 
off by their usual methods, joined hands ^with them, canceled former agree¬ 
ments they had with Barbados and Demerara merchants and, jointly with the 
Dutch Line, raised their rates from 27i cents to Barbados and 35 cents to 
Demerara to 45 cents per barrel. The Dutch steamers two months ago passed 
over to the United Fruit Co., under the above arrangement, and are now 
employed principally in the Central American fruit trade, but so profitable has 
this arrangement proved to the agents that they are now continuing this busi¬ 
ness with chartered steamers. 

As a matter of fact, Messrs. L. W. & P. Armstrong (representing the New 
York & Demerara Steamship Co.) who were running an independent line, have 
been obliged to give up the charter of the UUer, which was promptly taken 
up by the agents of the Royal Dutch West India Mail, and it was thus re¬ 
served to the Quebec Line to drive New York out of the West India trade, 
through an illicit combination with the Pickford & Black Line, of Canada, 
with whom they maintained a uniform schedule of rates, entirely forgetful 
of the fact that a Canadian railroad, being interested in the Pickford & Black 
liine, makes very low rates of freight from southern Canada to Halifax, so, as 
a matter of fact, Ontario goods can be shipi)ed via Halifax at 10 cents per 
barrel less than they can be shipped via New York (vol. 1, p. 1395). 

The Porto Rican Trade.^ 

Enumeration of regular line services .—Since its acquisition by 
the United States Porto Rico’s export and import trade has devel¬ 
oped in an unprecedented manner. In 1900 its imports from the 
United States were valued at $3,286,168, and the exports to the 
United States at only $2,477,480. By the end of 1912 these figures 
had grown to $38,470,963 and $42,873,401, respectively. It is also 
worthy of note that of the island’s total import and export trade 
87.8 per cent (89.5 per cent of the imports and 86.2 per cent of the 
exports) is controlled by the United States. 

Exclusive of the Benner Line of sailing vessels and a certain 
amount of tramp-vessel service, this large and rapidly growing trade 
with the United States is controlled by four steamship lines, viz, 


1 Although constituting a division of the domestic commerce of the United States, it 
was found advisable to make the discussion of the reiations between steamship lines 
engaged in the Porto Rican trade a subdivision of the chapter dealing with the Ameri¬ 
can-West Indian trade. 


25655°—^VOL 4—14-^15 




226 AGREEMENTS IN THE AMERICAN-WEST INDIAN TRADE. 

the New York and Porto Rico Steamship Co., the Insular Line 
(owned exclusively by F. K. Curtis), the A. H. Bull Steamship 
Co., and the Red “D” Line (Atlantic & Caribbean Steam Navigation 
Co.). All of the lines operate to and from New York, but the New 
York & Porto Rico Steamship Co. also conducts a service to and 
from New Orleans, and another from Galveston and Port Arthur, 
and is the only line operating from southern ports. Of these lines 
the first three are by far the most important in the trade,the Red “D” 
Line merely calling at the two Porto Rican ports of San Juan and 
Mayaguez on its route to and from Venezuelan ports. Moreover, 
this line’s Porto Rican cargo is very limited, consisting principally 
of coffee and tobacco northbound. It carries no raw sugar at all 
(this commodity constituting 63.4 per cent of the island’s total 
exports), because of the objectionableness of sugar as freight in 
conjunction with the coffee cargo carried by the line. All the other 
lines practically serve all the ports of the island, and handle the 
same general cargo both northbound and southbound (vol. 1, p. 650). 

Bate wars in the Porto Rican trade .—The Managements of all four 
lines, in reply to the Committee’s Schedule of Inquiries, have denied 
the existence of any agreements or understandings with any other 
lines engaged in the trade; and, with the exception of Messrs. A. H. 
and E. M. Bull, representing the A. H. Bull Steamship Co., all the 
representatives of the lines called before the Committee have testified 
to the same effect. In fact, all the evidence shows that for many 
years the lines engaged in this trade have had on their hands a con¬ 
stant succession of rate wars, and at present are engaged in a com¬ 
petitive struggle (occasioned by the entrance into the trade in 1911 
of the A. H. Bull Steamship Co.), which for bitterness and the extent 
of the rate cutting has been rarely surpassed. Each of these wars con¬ 
tinued until, through financial exhaustion, the lines were forced to 
come together and conclude an agreement. Rates would be restored 
and temporarily maintained, but only until a newcomer into the trade 
would force another contest for supremacy, as savage as its prede¬ 
cessor. Nearly all witnesses before the Committee have regretted 
the apparent impossibility of conducting this trade in a spirit of 
peace rather than war. Shippers in the trade who have communi¬ 
cated with the Committee also regarded the present cut rates as 
ridiculously low and ruinous to the maintenance of an efficient service. 


AGREEMENTS IN THE AMERICAN-WEST INDIAN TRADE. 227 

They are almost unanimous in condemning cutthroat competition, as 
resulting in objectionable discriminations between shippers, and in 
asserting that the present state of affairs means an impairment in the 
efficiency of the regular line service, not merely because of financial 
loss to the lines, but by reason of the fact that many shippers wait 
for the cut-rate weeks when the Bull line has sailings, thus causing 
a congestion of cargo so serious as to greatly delay the movement of 
freight. 

An understanding of the causes and nature of the existing rate 
war between the lines can best be had by briefly considering the 
chain of events preceding the entrance of the A. H. Bull Steamship 
Co. into the trade in 1911. According to the evidence, Mr. A. H. 
Bull started a sail-vessel line to Porto Rico about 1873, which was 
later converted into a steamer line. Hardly had this steamship line 
been successfully started when Mr. J. M. Ceballos sought to drive 
it out of the trade. Rates were cut to 10 cents a barrel, and con¬ 
tracts with shippers were made in Porto Rico by Mr. Ceballos, pro¬ 
viding for a payment of a rebate at the end of the year, if shipments 
were confined exclusively to his line. Neither being able to eliminate 
the other, and both having lost heavily, the two interests combined 
and formed the New York & Porto Rico Steamship Co., each ac¬ 
cepting a one-half interest and the A. H. Bull interests assuming the 
management of the business on a commission basis (vol. 2, p. 1209). 

Discriminations between shippers were now eliminated and, despite 
the objections of many in the trade, the same rates were charged all 
shippers, irrespective of the volume of freight furnished. “For 
eight years,” Mr. Bull testified, “ there was no competition, nor was 
any wanted by the merchants.” Then followed the acquisition of 
Porto Rico by the United States, and the line was obliged to employ 
American steamers. New steamers were built and, in order to 
finance them, the line was obliged to issue bonds, which Mr. John E. 
Berwind was induced to take (vol. 2, p. 1209). Following this, owing 
to internal dissensions and criticisms of the management of the line, 
Mr. Bull felt forced to sell out his interest, and in order to sell was 
obliged (in 1900) to sign a bond to remain out of the Porto Rican 
trade for a period of 10 years (vol. 2, p. 1209). This bond, Mr. Bull 
asserted, was drawn up by Mr. F. K. Curtis, then counsel for Mr. 
John E. Berwind, and now sole owner of the Insular Line (vol. 2, 

p. 1210). ' . ^ ^ - 


228 AGREEMENTS IN THE AMERICAN-WEST INDIAN TRADE. 

About 1905 a representative of the firm of W. E. Peck & Co., while 
in Porto Kico in the interest of the firm as commission .merchants, 
took note of the New York & Porto Kico Steamship Co.’s practical 
monopoly of the trade between the United States and the island. 
As a result the so-called Peck Line was started, Messrs. W. E. Peck 
& Co., as general agents, controlling the majority of the stock (vol. 
2, p. 770). They established rates lower than the New York & Porto 
Rico Steamship Co.’s tariff, and at once brought on a freight war 
which lasted until some time in 1906, both companies losing heavily. 
Following this rate war, W. E. Peck & Co. notified their stockholders, 
as testified by Mr. E. M. Bull, “ that certain persons, whom they 
were not at that time at liberty to mention, had made them an offer 
to take over the Peck Line and continue its existence ” (vol. 1, p. 
770). Since the freight war had exhausted the funds of' the line, 
the majority of the stockholders agreed to accept the offer, W. E. 
Peck & Co. continued to act as general agents, and the name of the 
line was changed to the Insular Line (vol. 1, p. 770). This line, it 
may be stated here, is now owned by the Corporate Organization & 
Audit Co., all of the stock of which is owned by Mr. F. K. Curtis 
vol. 1 , pp. 688, 689). Mr. E. M. Bull also testified (1) “that the Peck 
Line ran a service from New Orleans as well as New York, but as 
soon as it became the Insular Line the service from New Orleans to 
Porto Kico was discontinued and the New York & Porto Kico Steam¬ 
ship Co. had that field to itself”; and (2) “the New York & Porto 
Rico Steamship Co., put its rates back to the published tariff, and 
the Insular Line maintained the New York & Porto Kico Steamship 
Co.’s tariff, less varying percentages, I believe not exceeding 16J 
per cent. This difference in rates about covered the difference of 
the cargo insurance between the two lines. As Mr. Curtis stated, 
his boats were older, and merchants who shipped by them had to pay 
higher rates of insurance than they did via the Porto Kico Line” 
(vol 1, p. 770). 

No sooner had the Insular Line succeeded the Peck Line, than, 
according to the testimony of Mr. Curtis (vol. 1, pp. 689, 690-691, 
692, 707-708), a rate war began with the Red “ D ” Line. The reg¬ 
ular tariff rates were cut at least 33^ per cent, and on some articles 
50 and 60 per cent, and the Insular Line notified shippers by circular 
that it would grant the same discounts from the tariff as the Red 
“ D ” Line and “ in addition to such discount will allow a brokerage 


AGREEMENTS IN THE AMERICAN-WEST INDIAN TRADE. 229 

's.. 

of 5 per cent on the amount of freight paid, * * ♦ same to 

be deducted from the net amount thereof.” (For sample notice see 
vol. 1, p. 691.) It is worthy of note that the Insular Line’s circular 
to shippers refers only to the Red “ D ” Line and does not mention 
the New York & Porto Rico Steamship Co., which Mr. Curtis testified 
“ did not participate in the fight, if I remember correctly ” (vol. 1, 
p. 692). This freight war was continued, according to Mr. Curtis, 
until both lines “ decided that they had enough.” Both lines decided 
to “ just restore rates,” but Mr. Curtis was certain that this restora¬ 
tion of rates was absolutely not the result of any agreement or under¬ 
standing (vol. 1, pp. 692, 693). 

This brings us to the present rate war, instituted in 1911 by the 
entrance of the Bull Steamship Line into the trade. Mr. Bull’s 10- 
year bond, whereby he agreed with the New York & Porto Rico 
Steamship Co. to remain out of the Porto Rican trade for that num¬ 
ber of years, had now expired. Although threatened with dire 
punishment, he saw fit, in the early part of 1911, to start steamers in 
the trade, and thus once more a freight war followed which for the 
extent of the rate cutting seems to have no limit. 

Mr. Bull’s troubles in conducting this contest, as related to the 
Committee in his testimony as well as in his answers to the Com¬ 
mittee’s Schedules of Inquiries, are many. In the first place, he re¬ 
ported to the Committee that “In the winter of 1911-12 we en¬ 
deavored to charter steamers on time charter for the Porto Rican 
trade. We found there was an agreement existing between the 
Estate of Lewis Luckenbach, Edgar F. Luckenbach, the New York 
& Porto Rico Steamship Co., the Insular Line and also all other 
subsidiary lines of the Atlantic, Gulf & West Indies Steamship Lines, 
by which we could not charter a steamer from any of the individuals 
or corporations named above, unless we agreed that they would not 
engage in the Porto Rican trade. This condition exists at the 
present time. Although the Insular Line will charter to the New 
York & Porto Rico Steamship Co., and the latter line to the Insular 
Line, or the Estate of Lewis Luckenbach or Edgar F. Luckenbach 
will charter to either, it is impossible for us to charter any outside 
boat at any price for the Porto Rican trade”. The reply of Mr. 
Curtis to this charge is that when his line began to charter Mr. 
Luckenbach’s ships it was only reasonable to ask him, if his vessels 
were chartered for a period of three years, not to furnish any of his 


230 AGREEMENTS IN THE AMERICAN-WEST INDIAN TRADE. 

/ 

other vessels to competitors. To prevent Mr. Luckenbach from 
doing so, the agreement provided that the charter rates paid by the 
Insular Line would be reduced 10 per cent if he placed any of his 
many other ships in the trade (vol. 1, p. 701). 

In the second place, the Management of the Bull Steamship Co. 
reported to the Committee that the Insular and New York & Porto 
Rico Steamship Lines have informed them “ that they will follow 
up all the business we are doing and as fast as our contracts with 
shippers expire, they will either oblige us to take the business for 
nothing or force us out.” Moreover, the Bull Steamship Co. is also 
engaged in the Atlantic coastwise trade, and in this connection the 
Management reports that “ the New York & Porto Rico Steamship 
Co. being a part of the Atlantic, Gulf & West Indies Steamship 
Lines, which controls steamers covering practically the whole coast, 
the whole company joins in attacking any line that may be competing 
against any of its subsidiary lines.” 

Lastly, the Management reported that ‘‘ the two competing lines 
(New York & Porto Rico Steamship Co. and the Insular Line) 
which touch all the ports of Porto Rico, maintain their respective 
tariffs, except when we have sailings, when they cut their tariffs 
70 per cent.” The Bull Steamship Co., it seems, began business 
with a cut of 20 per cent below the New York & Porto Rico Co.’s 
tariff (vol. 1, p. 392) and publicly announced by circular that they 
would make a discount from present tariff rates, that their reentry 
into the Porto Rican trade would secure for shippers lower freight 
rates and more considerate treatment from all lines, that their with¬ 
drawal for lack of patronage would mean the immediate restoration 
of former high rates, and that it was their intention to meet all 
competition. (For copy of circular see vol. 1, p. 638.) The 20 per 
cent cut with which the line began, as Mr. A. H. Bull explained, 
“ was very little lower, only about 3 or 4 per cent, than the Insular 
Line was then carrying freight for, as they had what they called 
a system of discounts, a discount of 10 to 16J per cent” (vol. 1, 
p. 393). 

The Bull Steamship Co. having announced a cut in rates, the repre¬ 
sentatives of the other lines testified that there was nothing else to 
do but to meet the rates and to adopt measures for protection. The 
Insular Line issued numerous circulars to the shipping public (repro- 


AGREEMENTS IN THE AMERICAN-WEST INDIAN TRADE. 231 

duced iji vol. 1, pp. 393-399) outlining the line’s “ policy of meeting 
cut-rate competition,” and calling attention to the fact that in the 
weeks when the Bull Steamship Co. had sailings the line would give 
a stated discount (cut-rate) greater than its established discount. 
Some of the circulars offer a “ positive guarantee ” that the line’s 
“ net rate to the same ports by a steamer sailing in the same week will 
be 5 per cent lower than the net rates accepted by the A. H. Bull 
Steamship Co. on freight carried by them in that week to such ports.” 
This offer to go the Bull Line 5 per cent better was adopted on the 
ground that “ as our competitors had no re^lar tariff, but were 
apparently quoting different rates on every steamer, we issued a cir¬ 
cular saying that the Insular Line would give rates 5 per cent less 
than those quoted by the Bull Line in competitive weeks to competi¬ 
tive ports” (vol. 1, p. 395). Still other circulars called attention to 
the fact that cargo was being offered for every steamer largely in 
excess of the carrying capacity of the steamer, and that, since this 
worked a hardship on shippers, “ all of whom expected reduced 
rates this week,” the line was forced to adopt a policy, when neces¬ 
sary, of cutting down the requests for cargo space proportionately, 
so that the line would not be under the necessity of leaving any cargo 
behind for which bills of lading had been signed. 

At first, as stated, the regular tariff rates of the New York & Porto 
Rico Steamship Co. were cut 20 per cent. Soon, however, the cut 
was extended successively to 25, 35, 40, 50, 60, and finally TO per 
cent. After about six months of rate cutting by the Insular Line, 
the New York & Porto Rico Steamship Co. also began issuing cir¬ 
culars announcing rate discounts, which Mr. A. H. Bull testified 
reached 70 per cent, while the Red “ D ” Line cut the rates by at least 
50 per cent (vol. 1, p. 403). The circulars, however, expressly pro¬ 
vide that the discounts will be granted only in the weeks when the 
Bull Line has sailings, in many instances, for example, reading to 
the effect that ‘‘ as the Bull Steamship Co.' have failed to keep their 
promise of a sailing on June 10, please note that rates by cur steam¬ 
ers sailing on the 10th will be our regular tariff rates.” Special 
attention is also called to the fact that all of the Insular Line’s cir¬ 
culars, despite the cutting of rates by all the lines, deal exclusively 
with the Bull Steamship Co. and make no reference whatsoever to 
any opposition from the New York & Porto Rico Steamship Co. 


232 AGREEMENTS IN THE AMERICAN-WEST INDIAN TRADE. 

Attempts to effect a settlemervt .—Wliile the evidence is very con¬ 
flicting as to who took the initiative in making overtures for the 
cessation of hostilities and the conclusion of an amicable working 
arrangement, each accusing the other of having made the first move 
to suggest an agreement or understanding (and in this respect great 
fear of violating the Sherman Antitrust Law is entertained by all), 
the evidence before the Committee can leave no doubt that both sides 
are tired of the struggle, and that both from the very beginning of 
the contest probably sought a reconciliation. Mr. A. H. Bull, on the 
one hand, testified that, at about the time his line entered the trade, 
he wrote to Mr. John E. Berwind, a director of the New York & 
Porto Pico Steamship Co. and tried to convince him of the foolish¬ 
ness of trying to drive him out by rate cutting, and suggested that 
the matter had better be compromised at once, as in any event it 
would have to be done in the end (vol. 1, pp. 1210-1211). At the 
time when Mr. Morse sought to effect his combination of steamship 
lines, Mr. Bull claims that Messrs. Berwind, Curtis and Mooney, 
(the latter being Vice President of the New York & Porto Pico 
Steamship Co.) sought to have him put his boats in the deal and 
retire from the business (vol. 2, p. 1211). Moreover, Mr. Curtis 
in November of 1911, made Mr. Bull a memorandum offer (pub¬ 
lished in vol. 2, p. 1212) whereby, as stated by Mr. Bull, “ he wished 
us to charter three of our steamers to the Insular Line and agree not 
to charter any other of our fleet for the Porto Pican business.” When 
it was seen that the Bull Line had entered the Porto Pican trade in 
earnest, Mr. J. D. Phillips, Vice President and Secretary of the 
Insular Line, also offered (testimony of A. H. Bull, vol. 2, p. 1210) 
to charter its steamers, and offered even more for them than Mr. Bull 
had previously offered to let him have them for. According to the 
testimony Mr. Mooney also expressed his willingness to allow the 
Bull Line 50,000 tons of sugar and two steamers in the trade, but only 
on the condition that the line would make its rates the same as those 
of the New York & Porto Pico Line (A. H. Bull’s testimony, vol. 
2, pp. 1213-1214). 

On the other hand, Mr. Mooney testified that Mr. Bull expressed 
a desire not to have a rate war, and voluntarily offered to limit the 
amount of his tonnage in the Porto Pican trade or the number of 
sailings, the same to be mutually agreed upon, provided that he 
would be allowed to enjoy a 25 per cent differential (vol. 1, p. 630). 


AGREEMENTS IN THE AMERICAN-WEST INDIAN TRADE. 233 

This proposition was declared by Mr. Mooney to be impossible since 
in his judgment it was in violation of the Sherman Anti-Trust Law, 
as it was in restraint of trade. The remainder of Mr. Mooney’s 
testimony may be summarized as follows: Mr. Bull upon inquiry 
admitted that his proposition was illegal, but stated that a “ gentle¬ 
men’s agreement” could legally be entered into. While the New 
York and Porto Bico Line was willing to charter his ships, it was not 
willing to enter into an agreement with him. Under those conditions 
Mr. Bull was determined to run his own line and stated that if an 
amicable arrangement were not concluded with him, he would fight 
and cut rates until he forced recognition (vol. 1, p. 630). 

Friendly relations between the Insular and New York (& Porto 
Rico Steamship Lines. —Although both Mr. Mooney and Mr. Curtis 
denied absolutely the existence of any relationship between the lines 
by agreement, understanding, ownership or interlocking directorates, 
either directly or indirectly, there are many facts which would seem 
to indicate that the two lines are on the most friendly terms and 
act in unison. All the information obtained by the Committee from 
numerous shippers in the trade tends to confirm this conclusion. Not 
only does the testimony appear to show that the Insular Line is al¬ 
lowed by the New York & Porto Rico Steamship Co., the dominant 
carrier in the trade, to have a share of the business from New York 
at an established schedule of discounts from the New York & Porto 
Rico Line’s tariff, but, as already stated, immediately following the 
acquisition of the Peck Line and the establishment of the Insular 
Line, the rate war of 1906 ceased and the Peck Line’s service from 
New Orleans was discontinued, leaving the regular line service from 
Gulf ports solely in possession of the New York and Porto Rico 
Line. All the circulars of the Insular Line announcing cut rates, it 
will also be recalled, were directed solely against the Bull Line, 
although the New York & Porto Rico Line was also cutting rates 
with a vengeance. 

All the testimony of Messrs. A. H. and E. M. Bull is also to the 
effect that the two lines are working in thorough accord. The fol¬ 
lowing facts were offered by them as confirming their belief in this 
respect: 

(1) That the New York & Porto Rico Line has accorded a 
position in the trade to the Insular line, and allows them to have a 


234 AGREEMENTS IN THE AMERICAN-WEST INDIAN TRADE. 

part of the business without competition, and that Mr. Mooney has, 
in fact, stated that much (A. H. Bull’s testimony, vol. 2, p. 1213). 
Mr. Curtis, as owner of the Insular Line, could not have hoped to 
continue in the trade, if he had not induced the New York & Porto 
Rico Line to leave him unmolested. Mr. Ernest Bull testified that 
at the time the Bull Line entered the trade, Mr. Phillips of the 
Insular Line offered to charter its boats, and while denying that 
there was any arrangement between the lines, stated that “ as long 
as we maintain the rates we are now taking there will be no fight 
between the Insular Line and the New York & Porto Rico Steam¬ 
ship Co.” (vol. 2, p. 774). 

(2) That at the time Mr. F. K. Curtis organized the 
Insular Line, he was Secretary and Treasurer of the United States 
& Porto Rico Navigation Co., which owned all the vessels operated 
by the New York & Porto Rico Steamship Co. This is shown by the 
following testimony of Mr. E. M. Bull, (vol. 2, p. 771) : ‘‘Mr. Curtis 
stated that he is the Insular Line. According to Moody’s Manual Mr. 
F. Kingsbury Curtis was Secretary and Treasurer and a member of 
the Board of Directors of the United States & Porto Rico Navigation 
Co. during the years 1903,1904,1905, and 1906, or up to the time that 
his company was bought by C. W. Morse. The United States & Porto 
Rico Navigation Co. was the holding company, or parent company, 
which owned all of the property operated by the New York & Porto 
Rico Steamship Co. of New Jersey. After Mr. Morse bought con¬ 
trol of it in April, 1907, the New York & Porto Rico Steamship Co. 
of Maine became the successor of the United States & Porto Rico 
Navigation Co. You, therefore, will see that according to Mr. Cur¬ 
tis’s testimony he states the Insular Line was started in the fall of 
1906. I do not think it is too much to assume that Moody’s Manual is 
correct, and at the time the Insular Line was started that Mr. Curtis 
was Secretary and Treasurer and a member of the Board of Direc¬ 
tors of the United States & Porto Rico Navigation Co., which con¬ 
trolled all the property operated by the New York & Porto Rico 
Steamship Co. of New Jersey.” It should also be stated that the 
New York & Porto Rico Steamship Co. of Maine (owning the 
New York & Porto Rico Steamship Co. of New York, the operating 
company) is owned in turn by the Atlantic, Gulf & West Indies 
Steamship Co., a corporation formed to take over most of the Morse 


AGREEMENTS IN THE AMERICAN-WEST INDIAN TRADE. 235 

interests after his failure. In the reorganization following the col¬ 
lapse of Mr. Morse’s steamship combination, Mr. Curtis, as counsel, 
not only represented Mr. John E. Berwind, from whom Mr. Morse 
had bought stock of the New York & Porto Eico Line and had not 
paid for it, but also Mr. Morse’s creditors generally, in connection 
with the reorganization committee of the lines (vol. 1, pp. 696-697). 

(3) That when the Peck Line chartered Luckenbach boats 
under time charter, there was no arrangement in the agreement, such 
as the Insular Line afterwards had, providing for a 10 per cent de¬ 
duction in case Mr. Luckenbach chartered vessels to anyone else in 
the trade. The fact also remains that while no boats can be chartered 
to the Bull Line, Mr. Luckenbach can charter boats to the New York 
& Porto Eico Line as well as the Insular Line, i. e., the Insular Line 
made a contract with the Luckenbachs forbidding them to charter 
to competitors, except the New York & Porto Eico Line (vol. 2, 
p. 773). 

Rates from New York and from New Orleans and Galveston to 
Porto Rico compared. —Mr. H. H. Haines, Traffic Manager, of the 
Galveston Commercial Association, complained to the committee 
that while “ordinarily every other rate out of Galveston to every 
port in the world is the same as the rate from New Orleans, * * * 

this is not the case with reference to Porto Eico, which, while buying 
a great deal from Texas, is barred to us on the New Orleans basis, 
simply because we have no competition” (vol. 2, p. 1113). The New 
York & Porto Eico Line, as already pointed out, is the only line 
operating from Gulf ports to Porto Eico, and its rates from New 
Orleans are about 15 per cent higher than from New York, and from 
Port Arthur and Galveston about 20 per cent. (Testimony of F. D. 
Mooney, vol. 1, p. 648.) The difference in rates between New Orleans 
and Galveston is attributed by Mr. Mooney to the greater distance 
from Galveston to Porto Eico (New Orleans being 152 miles nearer), 
and the higher cost of bunker coal and dock facilities at Galveston 
(vol. 1, pp. 648-649). It may be added here that the New York & 
Porto Eico Line is a member of the Gulf Foreign Freight Commit¬ 
tee, the membership of which, as we have seen, also comprises all of 
the lines operating from Gulf ports to Cuba. 

Mr. Haines further testified that to overcome the difference in rates 
between New Orleans and Galveston, he and other parties of Gal- 


236 AGKEEMENTS IN THE AMERICAN-WEST INDIAN TRADE. 

veston sought to operate their own line. Their inability to charter 
an American steamer for the trade, and the reason for their failure 
is set forth by Mr. Haines as follows: 

We found a steamer on satisfactory terms and were prepared to charter li. 
When we came to close the contract the people who owned the boat asked us 
where we expected to run and we told them to Porto Rico. They responded 
that under no circumstances could they charter us a boat to put in competition 
with any of the coastwise lines regularly operated. ♦ ♦ ♦ An extract from 

a letter of the agents proposing to charter that steamer stated that “as a 
matter of fact the owners of this vessel, or any other steamer belonging to the 
coastwise trade, could neither be sold nor chartered to run in competition to 
any of the domestic lines running out of New York. This seems to be a natural 
agreement, so you would have to give me all the particulars before going any 
further into this matter.” (Vol. 2, p. 1112.) 

Contracts with shippers and discrimination in rates between ship¬ 
pers .—In the absence of an amicable understanding between the lines 
in a given trade, the desire for self protection causes each line, unless 
prevented from doing so by government regulation, to resort to secret 
and preferential arrangements with individual shippers in order to 
secure their freight. In this respect the Porto Pican trade offers an 
excellent illustration of the existence of special contracts with ship¬ 
pers and discrimination in rates. 

Representatives of the Porto Rican lines have frankly acknowl¬ 
edged that shippers in this trade, under present conditions, are not 
treated alike. Mr. F. D. Mooney testified that the New York & 
Porto Rico Steamship Co. has many special contracts with shippers 
in both the homeward and outward voyages, that different contracts 
quote different rates, but that no system of deferred rebates exists in 
the trade (vol. 1, p. 632, 637). He was frank in stating that, under 
present conditions, one shipper might be granted rates lower than 
another; that at a given time, and on the same vessel and with refer¬ 
ence to the same commodity, a large shipper might get a more favor¬ 
able rate than his smaller competitor; and that his line made a dis¬ 
tinction between shippers on account of the quantity shipped (vol. 1. 
pp. 634, 635, 636). 

In its circular letter to shippers, under date of July 12, 1911 (vol. 
L, p. 395), the Insular Line gives the following lucid explanation of 
the effect which the rate war had in compelling it to change its 


AGREEMENTS IN THE AMERICAN-WEST INDIAN TRADE. 237 

former policy of charging uniform rates to all shippers. The fol¬ 
lowing is the statement:— 

We feel that the trade with Porto Rico in order to flourish requires a weekly 
service at steady and reasonably remunerative rates rather than infrequent 
sailings at fluctuating tariffs and cut rates which can not be permanent. We 
feel also that the importers in Porto Rico will make no greater proflt from their 
business with fluctuating tariffs and cut rates than under our former regular, 
reasonable, and steady rates, which were the same for every shipper, yet we 
feel that we, who have always quoted lower rates than any other steamship line 
in the fleld and who have quoted uniform rates to all shippers of the same 
kind of merchandise by the same steamer, can not allow our competitors to 
take credit to themselves for the present reductions in rates which were forced 
upon them by us. The policy of this company has been and will at all times 
continue to be based upon giving our customers the lowest rates to Porto Rico, 
so that in the near future shippers may expect to see as much as 70 per cent 
discount from the Porto Rico Line tariff rates. 

Mr. Mooney testified that his line “ makes its rates according to con¬ 
ditions and they naturally vary,” and that it has special contracts 
with a great many shippers, among them being the American To¬ 
bacco Co., National Packing Co., Swift & Co., the Texas Co., etc. 
(See list in vol. 1, p. 636.) The form of the contract is the same in 
all cases, except where port conditions are different, or where dif¬ 
ferent rates may be quoted (vol. 1, pp. 636, 637). The contract of 
May 23, 1912, with Swift & Co. (vol. 1, pp. 632-634), for example, 
provides that the shipper has the privilege of forwarding via steam¬ 
ers of other lines than those of the New York & Porto Kico Steam¬ 
ship Co. ten per cent of all their provision shipments between the 
United States and Porto Rico, but in consideration of the rates 
named it is understood that during the life of the agreement all their 
remaining provision cargo is to be shipped by the contracting line’s 
vessels. It is further agreed that if any general reduction is made 
by the line in its present freight rates on commodities handled by 
the shipper, the latter are to have the proportionate benefit of such 
reduction during the period that the contract is.in force. 

When asked to furnish his line’s contracts with shippers, Mr. 
Mooney requested that there be no disclosure of the rates charged 
(vol. 1, p. 636). Mr. Bull, likewise, requested that he be not asked 
to disclose his contract arrangements with shippers, since, as he states 
in reply to the Committee’s Schedule of Inquiries “self-protection 


238 AGREEMENTS IN THE AMERICAN-WEST INDIAN TRADE. 

makes it imperative that we withhold any information regarding this 
subject at this time for the reason that our competitors have informed 
us that they will follow up all the business we are doing, and as fast 
as our contracts expire will either oblige us to take the business for 
nothing or force us out. There is nothing we wish to withhold 
except so far as our competitors may secure the information to use 
against us.” He testified that his line can only protect itself with 
long-term contracts, some for three years, and that in this way it is 
“getting a higher rate of freight to Porto Eico than either of its 
competitors on a great many things” (vol. 1, p. 413), 


CHAPTEK IX. 

TRAFFIC AGREEMENTS BETWEEN AMERICAN RAILROADS AND 

FOREIGN STEAMSHIP LINES. 


Extent of Agreements. 

Since such agreements have not been filed with any governmental 
authority, except in a limited number of instances, it was found 
necessary to obtain the same directly from the rail and water car- 
liers. Accordingly the Committee requested all the railway com¬ 
panies of the country at all likely to have affiliations with water 
transportation companies to answer the following inquiry; 

Has your company any traffic agreements, or any understandings or work¬ 
ing arrangements, with any water transportation lines either domestic or 
foreign as regards any of the following: (1) the establishment of a service 
between designated ports; (2) through routing arrangements; (3) the divi¬ 
sion of traffic, or a territorial division of routes; (4) the provision for an ex¬ 
clusive working arrangement between the railroad and the steamship line in 
matters of water transportation; (5) mutual assistance in obtaining traffic; 
(6) meeting the competition of other lines; (7) the time and number of sail¬ 
ings between designated ports; (8) the fixing, maintenance and division of 
joint rates. If so, give the names of such navigation companies, firms, or lines. 
FURNISH A COPY OF EACH AGREEMENT IF IT EXISTS IN WRITING. 
If any of the agreements or understandings, referred to above, have not been 
reduced to writing, state the essential terms of such agreements or understand¬ 
ings. 

All except 7 of the 185 railway companies to whom this inquiry 
was directed complied with the Committee’s request. These replies 
show that New York, New Orleans and Galveston are apparently 

open ports,” all of the railroads leading thereto having answered 
all the divisions of the above-mentioned inquiry in the negative. 
Nearly all other Atlantic, Gulf and Pacific ports of the country, 
however, are served by at least one, and in some instances by from 
four to six, foreign steamship lines which have entered into prefer- 

239 



240 AGREEMENTS BETWEEN RAILROADS AND STEAMSHIP LINES. 

ential traffic agreements with the leading railroad or railroads center¬ 
ing at these ports. At least 32 such agreements or arrangements have 
been brought to the attention of the Committee, and it is the pur¬ 
pose of this section of the report to outline the essential stipulations 
of these agreements as reported to the Committee, special emphasis 
being given to those provisions which are exclusive or preferential 
in their application. For the sake of clearness the agreements are 
classified by ports, the ports in turn being grouped under the respec¬ 
tive headings of “Atlantic Ports,” “ Gulf Ports,” and “ Pacific Ports.” 

As introductory to the discussion it should be stated that a con¬ 
siderable number of the agreements, as submitted to the Committee, 
show that in certain respects an exclusive alliance exists between the 
parties to the contracts. It also appears that following the Inter¬ 
state Commerce Commission’s decision on May 7, 1912, (The 
Mobile Chamber of Commerce, et al. vs. the Mobile & Ohio Railroad 
Co. et al., I. C. C. 4242, and to be referred to later), a number of the 
exclusive contracts were modified in a few particulars so as to be¬ 
come, using the railroads’ expression, “ preferential ” rather than 
“ exclusive ” contracts. The distinction between “ preferential ” and 
“exclusive” agreements with steamship lines is a frequent and very 
much emphasized feature in the communications directed to the Com¬ 
mittee by railroad officials. But a careful reading of the modified 
contracts, with their many provisions for a “preferential” alliance 
between the parties in the use of railroad terminals and the solicita¬ 
tion and exchange of freight, causes one to wonder whether the 
change from a condition of “ exclusiveness ” to one of “ preference ” 
means much in actual practical results. It is believed that in this 
respect the terms of the agreements as outlined in the following 
pages will speak for themselves. Certain it is that most of the agree¬ 
ments have brought about a close preferential alliance between vast 
railway systems, controlling the traffic of large sections in the inte¬ 
rior of the United States, and important conference steamship lines, 
which is bound to prove a powerful aid to the preferred water car¬ 
rier as compared with any independent line not thus allied. In this 
respect attention is especially directed to the testimony of Mr. George 
S. Jackson, concerning the port of Baltimore, (vol. 2, pp. 1296 and 
1299), Capt. Robert Dolkr, relative to the port of Los Angeles,^ and 

1 Hearings before the Senate Committee on Interoceanic Canals, on H R 21969 part 8 

pp. 666, 667. ■ ■ ’ ' 



AGREEMENTS BETWEEN RAILROADS AND STEAMSHIP LINES. 241 

Mr. Horace Turner, with reference to Mobile.^ All stated that inde¬ 
pendent steamship lines could be instituted at these ports if en¬ 
couraged by the railroads and if allowed the use of railroad terminal 
and other facilities on the same favorable basis as the well-estab-' 
lished lines. 

Agreements with Reference to Atlantic Ports. 

Agreements with reference to New York, 

Excluding from consideration the various passenger agreements 
between nearly all the established North Atlantic steamship lines 
and the important railroad passenger traffic associations of the 
country,^ New York is an open port. None of the railroads leading 
into New York makes any reference, in its replies to the Committee’s 
Schedule of Inquiries, to the existence of any traffic agreement or 
arrangement with any steamship line operating from this port. 
Without exception, also, all of the steamship lines replying to the 
Committee’s Schedule of Inquiries (and .it may be repeated that 
these replies represent lines operating to all the geographic areas 
considered in the foregoing pages) denied under oath the existence 
of any agreements or understandings with American railroads which 
involve exclusive or preferential treatment. In fact, nearly all the 
steamship companies answered all the Committee’s inquiries with 
reference to railroad agreements in the negative, and in only a few 
instances did the companies state that the railroads issued through 
bills of lading, the steamship company in every case, however, 
obtaining its own full rate for the ocean voyage. 

Mr. Gottheil testified in this connection that agreements between 
the railroads and steamship lines are never made in New York, for 
the reason that there are so many railroads serving that port that 
there is no necessity for railroad agreements, and that the lines 
would rather be free to take cargo from every road, (vol 1, p. 367.) 

1 Hearings before the Senate Committee on Interstate Commerce on S. 47113 and S. 
957, part 7, pp. 371 and following. 

> These agreements, together with an outline of the arguments for and against the 
same, were fully discussed on pages 48-51, inclusive, of the chapter dealing with “ Pas¬ 
senger Agreements in the American-European Trade”. These railroad agreements were 
considered in connection with the discussion ,of steamship passenger agreements and 
pools in order to explain fully the manner of handling the steerage traffic. As shown 
in the foregoing pages, these agreements give to the contracting parties privileges which 

are withheld from outside competitors. 

25655“— VOL 4—14-^16 





242 AGREEMENTS BETWEEN RAILROADS AND STEAMSHIP LINES. 

But he added that “ when we consider other ports where the rail¬ 
roads own the docks and where the steamship lines are obliged to 
go to their terminals and load cargo, the condition is somewhat 
different. * * * The situation at present is that all along the 

coast the railroads do what they can to develop the port to which 
they are running. I think that the railroads have forced more than 
one steamship company to give them a service, although, perhaps, 
the conditions did not really w^arrant it. I know that the Boston 
roads have forced the steamship companies to go into Boston and 
take rates which they can get just as well at New York.” (vol. 1, 
pp. 3G7, 368.) 

Agreements with reference to Boston. 

The replies of the several railroads and steamship lines serving the 
port of Boston to the Committee’s Schedule of Inquiries indicate 
the existence of at least six agreements, viz., those between: 

(1) The Boston & Maine Railroad Co. and Furness, Withy & Co., 
(originally entered into between the Fitchburg Railroad Co. and the 
Warren Steamship Line on October 1, 1899, and renewed on March 1, 
1912, by the successors to these companies), with reference to the 
Liverpool service. 

(2) The Boston & Maine Railroad Co. and the Dominion Line 
(subsidiary of the International Mercantile Marine Co.), concluded 
on January 25, 1903, with reference to the Liverpool service. 

(3) The Boston & Maine Railroad Co. and the Holland-American 
Line (concluded December 7,1909, and extended on January 10, 1910, 
for a period of five years), with reference to the maintenance of a 
service to and from Rotterdam and Amsterdam. 

(4) The Boston & Maine Railroad Co. and the Hamburg-Ameri¬ 
can Line (entered into June 30, 1901, for a term of one year subject 
thereafter to termination by three months notice from either party 
to the other), relative to the traffic to and from Hamburg. 

(5 and 6) The New York Central & Hudson River Railroad Co., 
lessee of the Boston & Albany Railroad, and the Cunard Steamship 
Co. and the Leyland Steamship Line, relative to the Liverpool service. 

Of the foregoing agreements the first two, between the Boston & 
Maine and Furness, Withy & Co., Ltd., and the Dominion Line, are 
substantially the same in all essential particulars. In both instances 
the steamship lines agree to operate a regular service of prescribed 


AGREEMENTS BETWEEN RAILROADS AND STEAMSHIP LINES. 243 

frequency from certain docks of the railroad company, and in solicit¬ 
ing and engaging cargo to give preference, as far as practicable, to 
freight furnished for shipment by the railroad company, “ the inten¬ 
tion being to give the railroad company a preference in this respect.” 
The steamship lines are given the exclusive right to use the docks 
mentioned in the contract (Hoosac Tunnel Docks), and their steamers 
must dock only here, or where permitted by the railroad, “ and no¬ 
where else within the port of Boston.” But it is understood that the 
agreements do not prevent the steamship lines from using ‘‘their 
inland carriers for any freight between Boston and points not reached 
by the railroad or its connections, nor for export freight from any 
points whatever in case of failure of the railroad company to secure 
the amount required by the steamship line.” 

The railroad promises to furnish the steamship lines as low inland 
rates as it furnishes to any other line of steamships plying from the 
same docks, and the two parties agree to mutually assist each other 
in soliciting and Canvassing freight, “ the intention and meaning of 
the agreement being that the joint service shall be thoroughly per¬ 
formed so as to promote and encourage such joint business, to the 
mutual profit and interest of the parties hereto”. It may be added 
that the agreement with Furness, Withy & Co. contained one pro¬ 
vision not found in the agreement with the Dominion Line, viz., that: 

I “ If the traffic does not prove profitable the steamship company shall 
have the privilege of withdrawing any or all boats entirely from 
Boston, but shall not run them from any other American port, Port¬ 
land to Newport News inclusive, or any intermediate port ”. Upon 
the renewal of the contract for another five years from March 1, 
1912, the words, “ but shall not run them from any other American 
port, Portland to Newport News inclusive, or any intermediate port ”, 
were stricken out. But the renewal contract again declares that it 
“ is to be clearly understood that so long as the boats run to the port 
of Boston they shall run to the Hoosac Tunnel Docks, as provided 
for in said contract ”. 

According to the Boston & Maine’s agreement with the Holland- 
American Line, the steamship line agrees to establish a regular and 
efficient service from Kotterdam to Boston, and vice versa, primarily 
for the carriage and accommodation of freight to be furnished by or 
through the railroad or its connections. In the main the preferential 
treatment accorded by the parties to each other is not so apparent as 


244 AGKEEMENTS BETWEEN KAILKOADS AND STEAMSHIP LINES. 

in the other agreements pertaining to the port of Boston. The con¬ 
tract is comparatively brief, the steamship line simply obligating 
itself to deliver to the railroad all freight imported over its line from 
or through Rotterdam and Amsterdam, bound to points on the rail¬ 
road or its connections, and not designated by the shippers to be car¬ 
ried over other routes; and the railroad agreeing at all times to use 
its best endeavors to promote the business of the steamship company, 
and to furnish free wharfage facilities. Both parties offer to aid 
each other mutually in the solicitation of freight and to accord each 
other rates which in competition with other routes will enable the 
traffic to move. 

A consideration of the Boston & Maine’s agreement with the Ham¬ 
burg-American Line, as regards the service to and from Hamburg, 
will show that in most particulars it is similar to the agreements con¬ 
cluded with Furness, Withy & Co. and the Dominion Line, although 
in a few respects (to be noted) it is more preferential.^ Special atten¬ 
tion is called to the following provisions:— 

(1) Section 2, providing that the railroad company “ agrees not to 
furnish the use of its wharves and docks to steamers of other parties 
plying between Boston and Hamburg, excepting therefrom steamers 
carrying grain only. If increase of service is found to be necessary 
it must be mutually agreed to.” 

(2) Section 2, providing that the steamship line agrees during the 
continuance of the contract that “ all steamers, if any, managed or 
controlled by it from time to time, and regularly employed in the 
trade between the ports of Boston and Hamburg, shall dock on said 
Mystic Wharf and not elsewhere within the port of Boston.” 

(3) Section 9, providing that “In the event of ocean competition 
to the steamship line between Boston and Hamburg being instituted 
from wharves of other railroads terminating at Boston, the railroad 
company shall cooperate with the steamship company in meeting such 
competition.” 

(4) The agreement on the part of the railroad company, as ex¬ 
pressed in the communication of March 28, 1912,^ “ Not to make a 
traffic agreement from Boston nor to grant accommodations at the 

1 Since this agreement is illustrative of the provisions of the Boston & Maine’s con¬ 
tracts with other steamship lines, but in certain of its provisions is the most pref¬ 
erential contract submitted to the Committee with reference to the port of Boston, it 
as well as the modification of March 28, 1912, is reproduced in full as EJxhibit 1 (p. 259) 
in the exhibits to this chapter. 



AGREEMENTS BETWEEN RAILROADS AND STEAMSHIP LINES. 245 

Boston & Maine’s terminals to any other line of steamers between 
Boston and Hamburg, full cargo of grain excepted.” 

Although differing considerably in its wording from the foregoing 
agreements, the contract between the New York Central (lessee of the 
Boston and Albany R. R.) and the Cunard Steamship Co. aims to 
accomplish the same purpose as the Boston & Maine’s contracts. As 
stated in the agreement “ It is desired that relations in the nature 
of a close traffic alliance shall be maintained between the steamship 
company and the railroad company.” The Cunard Line agrees that 
it will maintain regular sailings; that all of its steamships coming to 
Boston shall dock exclusively at wharves of the railroad and there 
discharge and receive their entire cargo; and that, so far as lies 
within its power, it will deliver to the railroad company all import 
freight destined to points reached by the railroad or its connections, 
and in contracting for export freight to give the preference to, and 
to use its influence in favor of, the railroad and its connections, pro¬ 
vided the inland rates are as low as those made by competing routes, 
exclusive of the so-called “ differential lines.” But as in all preced¬ 
ing contracts this agreement declares that it shall not be considered 
as preventing the steamship line from using other inland carriers 
for any freight between Boston and ports not reached by the railroad 
or its connections, nor for export freight from any points if the 
railroad fails to secure the amount of freight required by the steam¬ 
ship line. The railroad company, on the other hand, agrees that it 
will reserve certain pier room for the exclusive use of the steamship 
line; that it will make all reasonable efforts to secure the amount of 
export freight required by the steamship line; that for both export 
and import freight between Boston and interior points it will make 
rates as low as those prevailing on similar traffic carried by its com¬ 
petitors, exclusive of the so-called “differential lines”; and that it 
agrees to give terms to the steamship company as advantageous as 
those given to any other steamship line using its wharves. The New 
York Central’s Management also reports in its replies to the Com- 
mittee’s Schedule of Inquiries that it has a contract with the Leyland 
Steamship Line, the terms of which have been agreed upon by cor¬ 
respondence, and are therefore not contained in a single instrument. 
While the Committee was not furnished a copy of this contract, the 
report states that the understanding between the parties as regards 


246 AGREEMENTS BETWEEN RAILROADS AND STEAMSHIP LINES. 

the collection of wharfage charges, the payment of charges and the 
liability for freight on the pier, are the same as stipulated in the con¬ 
tract with the Cunard Steamship Co. 

Agreements with reference to Philadelphia and Baltimore. 

The railroad companies serving the ports of Philadelphia and 
Baltimore have reported to the Committee under oath that they have 
no agreements or working arrangements with any foreign steamship 
lines that create or further any of the conditions enumerated under 
H. Ees. 587. The Philadelphia & Reading Railway Co.’s manage¬ 
ment, however, reports that it does provide at Philadelphia, free 
of charge, terminal facilities and piers for handling inward bound 
and outward bound cargo for the Philadelphia-Transatlantic Line 
(between Philadelphia and London), Philadelphia-Manchester Line 
(between Philadelphia and Manchester), Furness, Withy & Co. (be¬ 
tween Philadelphia and Leith), Scandanavian-American Line (be¬ 
tween Philadelphia and Copenhagen and Baltic ports), Holland- 
American Line (between Philadelphia and Rotterdam), Hamburg- 
American Line (between Philadelphia and Hamburg), and the 
Allan Line (between Philadelphia and Glasgow).^ 

In consideration of the terminal facilities thus provided, according 
to the report, the said steamship lines and the railway company co¬ 
operate in obtaining and handling the business between the ports 
mentioned and the interior, but the steamship lines also handle busi¬ 
ness in connection with other railroads as well as local business to and 
from the port. On the other hand, the railway company handles 
business in connection with other steamship lines, so that, it is 


1 Following the preparation of this chapter the Committee obtained copies of the 
four written agreements between the Philadelphia and Reading Railway Co. and the 
Scandinavian-American Line under date of Apr. 18, 1911; the Holland-American Line, 
under date of May 1, 1911; the Manchester Liners (Ltd.) under date of Jan. 1, 1913; 
and Furness, Withy & Co. under date of Jan. 8, 1913. The Committee was advised by 
the Philadelphia & Reading Railway Co. by letter under date of Sept. 19, 1913, that 
there are no other written agreements with any trans-Atlantic steamship lines and that 
the other working arrangements with trans-Atlantic lines, referred to in the Company’s 
answers to the Committee’s Schedule of Inquiries, are substantially as provided for in 
the above-mentioned four written agreements. Among the various provisions of these 
written agreements the following should be particularly noted : 

1. The steamship company’s steamers shall discharge and load at certain designated 
terminals of the railway company. 

2. The steamship company agrees to cordially cooperate with the railway company, 
its agents and connections, in encouraging and promoting the movement of through 
traffic over the lines of the railway company via the port of Philadelphia. 

3. The railway company agrees to furnish proper wharf accommodations to the 
steamship line free of charge. 

4. The railway company agrees not to encourage and support any other service to 
load at the designated terminals on the berth from the port of Philadelphia to the 
foreign ports mentioned in the contract during the continuance of this agreement to the 
detriment of the steamship company. 




AGKEEMENTS BETWEEN RAILROADS AND STEAMSHIP LINES. 247 

claimed, there is nothing in the arrangement between the steam¬ 
ship lines and the railway company which prevents the railway 
company from taking (for example) business destined to London 
in connection with the Atlantic Transport Line, or the Philadelphia- 
Transatlantic Line, operating from London, from handling busi¬ 
ness in connection with the Pennsylvania or Baltimore & Ohio 
Bailroads. In further consideration of the terminal facilities 
granted by the railway company at Philadelphia, the above-men¬ 
tioned steamship lines, it is explained, undertake to maintain a 
sufficient number of sailings to properly care for the regular flow 
of business, the Philadelphia-Transatlantic Line, Philadelphia- 
Manchester Line, Scandanavian-American Line and IFolland-Amer- 
ican Line undertaking to provide a fortnightly service, or not less 
than two steamers per month. 

Despite the foregoing explanation by the Philadelphia & Reading 
Railway Co., however, it should be stated that Furness, Withy & Co. 
(whose agreement with the Boston & Maine Railroad Co. has already 
been discussed and whose agreement with the Chesapeake & Ohio, 
Mobile & Ohio, and Southern Railway Companies with reference to 
the ports of Newport News and Norfolk will be referred to shortly) 
reported that it has “ an arrangement for free wharfage with the 
Philadelphia & Reading Railway Co. as respects its Philadelphia 
services and with the Northern Central Railroad (leased by the 
Pennsylvania Railroad Co.) as respects its Baltimore service,” and 
that “ these contracts are in suhstantially the same form ” as the 
agreement with the Boston & Maine Railroad Co., described in con¬ 
nection with the port of Boston.^ The Donaldson Line, which, like 
Furness, Withy & Co., has an agreement with the Chesapeake & Ohio, 
Mobile & Ohio, and Southern Railway Companies with respect to 
Newport News and Norfolk, also reports that it has a traffic arrange- 

1 Following the preparation of this chapter the Freight Traffic Manager of the Penn¬ 
sylvania Railroad Co. furnished a copy of the written agreement entered into between 
the Northern Central Railway Co. and Furness, Withy & Co. (Ltd.) as regards the Bal¬ 
timore service. This agreement was made on Oct. 5, 1909, and provides: 

1. That the railway company will work, as far as possible, with the steamship line 
in the trade between Baltimore and Leith, Scotland, and vice versa. 

2. That the railway company will provide, free of expense, the necessary dock accom¬ 
modations for the loading and discharging of steamers. 

3. That the railway company will use its best endeavors to promote the business of 
the steamship line and cordially cooperate with. it in all reasonable requirements to 
further its interests. 

4. That it is “ agreed that each party hereto will use their best efforts to pi-omote 
the interchange of business tributary to both companies as against their individual and 
mutual competitors.” 




248 AGREEMENTS BETWEEN RAILROADS AND STEAMSHIP LINES. 

merit with the railroads centering at Baltimore for the providing 
of tonnage as the Glasgow traffic justifies. 

Agreements with reference to Newport News and Norfolk. 

The Chesapeake & Ohio, Norfolk & Western, and Southern Kail¬ 
way Companies have jointly concluded four agreements as regards 
Newport News and Norfolk, viz., (1) with the United States Ship¬ 
ping Co. on behalf of the Hamburg-Ameidcan Line relative to the 
traffic from Newport News and/or Norfolk to Hamburg, or vice 
versa; (2) with the United States Shipping Co. on behalf of the 
Donaldson Line relative to the traffic to and from Glasgow; (3) with 
the United States Shipping Co. on behalf of the Holland-American 
Line relative to the traffic to and from Rotterdam and Amsterdam; 
and (4) with Furness, Withy & Co., Ltd., (successor to the Chesa¬ 
peake & Ohio Steamship Co. Ltd.) relative to the traffic to and from 
London and Liverpool. All four agreements, which are preferential 
and in some respects exclusive in their character, are almost identical 
in their terms, and an outline of the essential provisions of the agree¬ 
ment between the aforementioned railway companies and the Ham¬ 
burg-American Line (reproduced in full as Exhibit II of the ex¬ 
hibits to this chapter (p. 261) will serve as an explanation of all. 

As long as regular and efficient service is furnished by the steam¬ 
ship line, the railways guarantee that all freight passing over their 
systems to Newport News and/or Norfolk for export to Hamburg 
shall, in so far as it is in the power of the railways to control the 
same, be shipped in steamers of the Hamburg-American Line. 
Ocean rates charged by the steamship line shall be the same as the 
accepted rates from Baltimore (with the exception of grain, cattle 
and cotton, the rates on which are to be agreed upon mutually from 
time to time with due regard to the rates ruling from Baltimore), 
and rates from Newport News and Norfolk shall at all times be on a 
parity with the rates made by the steamship company’s more north¬ 
ern services, irrespective of the rates from Baltimore, but with due 
regard to the class of cargo required by the steamers. In the case of 
cargo peculiar to the south the steamship line agrees to have every 
possible regard for the competition prevailing through Gulf, South 
Atlantic and Virginian ports, “it being distinctly understood and 
agreed that all freight engagements made by the railways will be 
reported to and are subject to confirmation by the steamship com¬ 
pany.” Similarly, as regards imports into Newport News and/or 


AGREEMENTS BETWEEN RAILROADS AND STEAMSHIP LINES. 249 

Norfolk, ocean rates of freight shall be no higher than the current 
rates accepted at the time by steamship lines running from Hamburg 
to either Philadelphia or Baltimore for similar goods; and it is fur¬ 
ther agreed that as regards all imports into Newport News and/or 
Norfolk covered by through rates, “ the rates of inland freight shall 
be no higher than the inland rates from Baltimore.” 

The railways and the steamship company agree to use their best 
efforts to ‘‘ extend, promote and improve the export and import traffic 
through Newport News and/or Norfolk”. In this respect the rail¬ 
roads will afford every reasonable accommodation and facility in 
their power to the steamship line for the convenient reception, con¬ 
veyance and delivery of freight. The railway companies further obli¬ 
gate themselves to use their best efforts to secure the cooperation of 
the Seaboard Air Line and the Atlantic Coast Line Railway Com¬ 
panies in delivering to the vessels of the steamship company all the 
export freight they control via Norfolk destined to Hamburg and 
Baltic ports. 

Agreements with reference to Brunswick. 

With reference to this port the Southern Railway Co. entered into 
an agreement with F. D. M. Strachan on November 2, 1909, for a 
steamship service to Liverpool, Manchester, Bremen and other foreign 
ports. In return for first-class freight steamers and regular sailings 
the railway company agrees to use its best efforts to obtain cargo for 
the steamers at ocean rates to be named by the steamship company but 
which are at all times to bear a fair relation to the ocean rates pre¬ 
vailing from south Atlantic and Gulf ports. The steamship line is 
given free dockage facilities, and the railway company further agrees 
that, unless compelled by legislative enactment or judicial decree 
to do otherwise, it will not issue through bills of lading to other 
steamers sailing direct from the port of Brunswick. On the other 
hand, the steamship line agrees not to enter into any arrangement 
with other parties to supply ocean service from the port without the 
consent of the Southern Railway Co., and also, to give the railway 
company the preference in transporting imports to the interior. Al¬ 
though the contract expired by its terms on January 1, 1913, the rail¬ 
way company reports that “ the parties to the contract are working 
upon the same basis as before the expiration of the contract.” 


250 AGREEMENTS BETWEEN RAILROADS AND STEAMSHIP LINES. 

Agreements with Reference to the Gulf Ports. 

Excluding from consideration the ports of Galveston and New 
Orleans (which as already stated are “ open ports ” ^), the answers to 
the Committee’s Schedule of Inquiries show the existence of at least 
seven agreements between certain steamship lines and the railroads 
serving the other leading seaports of the Gulf. As submitted to the 
Committee all of these agreements are either ‘‘ exclusive ” or “ pref¬ 
erential ” in their provisions, and for the purpose of explanation have 
been grouped under the following ports: 

Agreements with reference to Mobile, 

Four preferential agreements with steamship lines have been sub¬ 
mitted to the Committee by the railroads serving the port of Mobile, 
viz, (1) the agreement between the Munson Steamship Line and the 
Mobile & Ohio and Southern Railroad companies (dated May 13, 
1912, and amended on October 15, 1912), relating to the steamship 
service between Mobile and South American ports; (2) the agree¬ 
ment between the Munson Steamship Line and Southern Railway Co. 
(dated August 15, 1906, and amended October 15, 1912, and January 
10, 1913), relating to the service between Mobile and ports of Cuba, 
Mexico and the West Indies; (3) the agreement between the Munson 
Steamship Line and the Mobile & Ohio Railroad Co., (dated Novem¬ 
ber 11,1905, and amended on October 15,1912, and January 10,1913) 
relating to the service between Mobile and the ports of Cuba, Mexico 
and the West Indies, and (4), the agreement between the Mobile 
Liners, Inc., and the Southern and Mobile & Ohio Railroad companies 
(dated July 8, 1910, and amended October 30, 1912) relating to the 
service between Mobile and the ports of Liverpool, Bremen, Hamburg, 

^ No railroad or steamship line serving the ports of New Orleans and Galveston, in its 
answers to the Committee’s Schedule of Inquiries, reported the existence of any exclu¬ 
sive or preferential agreements with reference to these ports. Mr. Horace Turner in the 
Hearings before the Senate Committee on Interstate Commerce, S. 4713 and S. 957, 62nd 
Congress, 2nd Session, part 7, also stated that such contracts do not exist at these 
ports (pp. 371 and following). He states: “Galveston has always been an ‘open 

port ’. There is an intimation in the report that New Orleans was a ‘ closed 

port’ until last season; this is not a fact. Several railroads—the Illinois Central. 
Southern and its allies—would not issue through bills of lading out of New Orleans to 
Liverpool, except via the Leyland-Harrison Line. New Orleans was an ‘ open port ’ 
and through bills of lading were given to every steamship line via every other European 
port. The public at New Orleans complained so bitterly that these railroads receded 
from their position even as to Liverpool and not even this former stronghold of mo¬ 
nopoly for the Leyland-Harrison line exists.’’ That New Orleans and Galveston are 
“ open ports ’’ is also shown by the facts as stated in the case of Mobile Chamber of 
Commerce, et al. us. Mobile & Ohio Railroad Co. et al. (I. C. C. 4242, p. 419). 





AGREEMENTS BETWEEN RAILROADS AND STEAMSHIP LINES. 251 

Havre, Rotterdam and such other European or United Kingdom 
ports as may be agreed upon. The essential features of each of these 
agi’eements, and especially those which are exclusive or preferential 
in character, will be briefly summarized. Since all the agreements 
resemble each other in the main provisions, the agreement of May 13, 
1912, relative to the South American trade, between the Munson 
Steamship Line and the Mobile & Ohio and Southern Railroad com¬ 
panies, together with its modification of October 15, 1912, is repro¬ 
duced in full for illustrative purposes as Exhibit III (p. 264) of the 
“ Exhibits ” to this chapter. 

1. Agreement between the Munson Steamship Line and the Mobile 
(& Ohio and Southern Railroad Companies with reference to the 
South American trade from Mobile. According to its terms this 
agreement has for its purpose the upbuilding of commerce “ between 
Mobile and the port of Buenos Aires and such other South Ameri¬ 
can ports as may be agreed upon,” the steamship company agi*eeing 
to inaugurate at least a monthly service between the ports of Buenos 
Aires and Mobile and to increase the frequency of such service as 
fast as the volume of traffic warrants. The railroad companies agree 
to give the steamship line, free of charge, the exclusive use of certain 
pier room; and in turn the steamship line obligates itself to load 
and discharge all classes of cargo, both outbound and inbound, at 
such pier or piers, excepting the yellow pine business southbound, 
which may be loaded at any pier to suit the convenience of the water 
carrier. 

Excluding from consideration the numerous provisions outlining 
the method of fixing rates and handling the business, this agreement 
is noteworthy because of five “ exclusive ” provisions (to be noted) 
which it originally contained, but which, as the result of a decision of 
the Interstate Commerce Commission, were modified on October 15, 
1912, so as to be “ preferential ” rather than “ exclusive ” in their 
application to the contracting parties. In the case referred to 
(Mobile Chamber of Commerce, et al., vs. Mobile & Ohio Railroad 
Co., et al., I. C. C. 4242, decided May 7, 1912) the Interstate Com¬ 
merce Commission decided that it was illegal for a railroad to adopt 
a policy which will place its facilities at the exclusive service of one 
steamship line, but that the rail carrier may have a preferred steam¬ 
ship connection, provided such reservation does not involve a dis- 


252 AGREEMENTS BETWEEN RAILROADS AND STEAMSHIP LINES. 

crimination against traffic destined to the railroad company’s termi¬ 
nals and to be carried therefrom by other boat lines. It should be 
stated in this connection that the original exclusive contract of May 
13, 1913, contained the provision that “ nothing in this agreement 
shall be permitted to conflict with the provisions of the Interstate 
Commerce Act, or any other law now in force or hereafter to be 
enacted by the Government of the United States. It is, there¬ 
fore, agreed and understood that this agreement shall at all times be 
subservient to the requirements of such law, or laws, and shall be 
modified arbitrarily to conform therewith should it become necessary 
to do so.” In view of the aforementioned Interstate Commerce 
Commission’s decision, the “ exclusive ” provisions of the contract 
were modified so as to be “preferential.” All of the “exclusive” 
provisions referred to and their respective modifications are here¬ 
with presented side by side: 


EXCLUSIVE PROVISIONS IN THE CON¬ 
TRACT OF MAY 13, 1912. 


(a) “ The railroad companies 
agree to work exclusively with 
the steamship line in all matters 
of water transportation in terri¬ 
tories outlined in Article 1 here¬ 
of.” (Article II.) 


(b) “ The steamship line agrees 
to do all in its power to stimulate 
and increase the traffic over the 
lines of the railroads aforesaid 
and to put the route to be in¬ 
stalled hereunder on a competi¬ 
tive basis with like traffic via 
other ports as to ocean rates, in 
so far as it reasonably can.” 
(Article II.) 

(c) “ The steamship line agrees 
not to put on a steamship service 
to or from other Gulf ports to 
Buenos Aires or other South 
American ports, to which service 
may be operated under this agree¬ 
ment, without the written con- 
serU of the 'railroad companies 


MODIFICATION OF THESE PROVISIONS 
ON OCTOBER 15, 1912. 


This provision was continued 
in full in the modified contract, 
except that it was prefaced with 
the words: “ that so far as it law¬ 
fully may, or unless compelled by 
legislative enactment, or order of 
the Commission, or judicial de¬ 
cree to do otherwise ” the railroad 
companies agree, etc. 

This provision was continued 
in full in the modified contract 
but was followed by the addi¬ 
tional words: “ and, in so far as 
it lawfully may, to work prefer¬ 
entially with the said lines of 
railroads through the said port of 
Mobile and as to traffic through 
said port.” 

This provision was changed in 
two respects. In the first place 
the words (indicated in italics) 
“ "without the written consent of 
the railroad companies afore¬ 
said ” were changed to “ without 
at least 35 days written notice to 
the railroad companies afore- 






AGREEMENTS BETWEEN RAILROADS AND STEAMSHIP LINES. 253 


aforesaid^ except for the carriage 
of lumber and/or its products, or 
other freight which must be 
loaded at other ports in order to 
meet competition of other water 
carriers. This is not to he con¬ 
sidered as according any 'privi¬ 
lege to the steamship line to take 
cargo at other Gulf ports 'which 
reasonably can he loaded at Mo¬ 
bile or he shipped via Mobile.^'* 
(Article IL) 

(d) “ The steamship line shall 
not enter into any traffic contract 
with other rail lines at Mobile 
without the approval and consent 
of the Mobile & Ohio and the 
Southern Eailway.” (Article 
VIL) 


said.” Secondly, the last sen¬ 
tence (also indicated in italics) 
was entirely omitted. 


The approval required in this 
provision was altered so as to 
read: “ The steamship line shall 
not enter into any traffic contract 
with other rail lines at Mobile 
without at least 35 days written 
notice to the railway companies 
of the proposed contract and of 
its provisions.” 


2. Contracts het'ween the Mobile & Ohio Railroad Co. and the 
Southern Rail'way Co.^ and the Munson Steamship Line 'with ref¬ 
erence to traffic het'ween Mobile and the ports of Cuba^ Mexico and 
the West Indies. —These two contracts are substantially alike in thefr 
provisions, and are similar in character to the contract entered into 
by the same parties with reference to the South. American trade. 
Like the preceding contract, the railroads agree to work exclusively 
with the steamship line, unless compelled by legislative enactment 
or judicial decree to do otherwise, and to use every reasonable effort 
to aid and expand the traffic from the territory served by their lines. 
The steamship line in turn agrees not to put on a service from other 
Gulf ports without the written consent of the railway companies. 
Owing, however, to the aforementioned Interstate Commerce Com¬ 
mission’s decision, all of the “ exclusive ” provisions were changed to 
be “ preferential,” the amendments being similar to those outlined in 
connection with the contract governing the South American trade. 

3. Agreement het'ween the MobUe Ohio and Southern Railroad 
Companies and the Mobile Liners.^ Inc..^ 'with reference to the service 
het'ween Mobile and Liverpool., Bremen., Hamb'urg., Havre., Rotter¬ 
dam., and other European ports. —According to this contract the 
Mobile Liners agree “ to cover fully the Liverpool berth from Mobile 
with Leyland and Harrison owned and operated tonnage in accord- 





254 AGREEMENTS BETWEEN RAILROADS AND STEAMSHIP LINES. 

ance with the obligation so to do, found in the agreement made be¬ 
tween the Mobile Liners, Inc. and Leyland and Harrison Lines, which 
agreement is to run contemporaneously with this and is hereby made 
a part of this contract ”; and similarly to conduct the Havre and 
Bremen trade from Mobile with as much Leyland and Harrison ton¬ 
nage as can be obtained from those lines. At least 50 per cent of the 
service is to consist of regular line tonnage, taking first and second 
class liner insurance classification from Mobile for the cotton trade, 
and as much more regular line tonnage of the same class as is prac¬ 
ticable. The Liners Company agrees to use exclusively the docks of 
the railroad companies for all cargo, the railroad companies in turn 
designating certain docks for the preferential use of the Liners Com¬ 
pany. The Liners Company further obligates itself to the following: 

(1) To protect its ocean rates on export traffic competi¬ 
tive via other ports on the basis of prevailing rates from New 
Orleans, except that it is not obliged to protect rates which are 
temporary and caused by the existence of abnormal conditions at 
that port. 

l 

(2) Not to enter (this applying also to the Leyland and 
Harrison lines which the Mobile Liners Inc. represent) into any 
Contract with transportation companies to supply ocean service from 
Mobile, other than the New Orleans, Mobile & Chicago Railroad, 
without the consent of the railroad companies parties to this agree¬ 
ment. The Mobile Liners Co. undertakes to control the policy at 
Mobile of such steamship line or lines as it may contract with in the 
performance of this contract. 

(3) Not at any time to accept from shippers, brokers, 
steamboat agents, or other railroads, lower rates than are accepted at 
the same time from the railroad companies parties to this agreement, 
and, similarly, at all times to “ absolutely work preferentially with 
the railroad companies on all competitive business.” 

(4) To give the railroad companies preference in the 
transportation of such shipments as are controlled by the Liners 
Company destined to points in the interior reached by the railroad 
companies directly or through their connections, provided the rates 
of the railroad companies to interior points are not higher than 
those charged by competing companies. 

In return for the above promises on the part of the steamship line, 
the railroad companies agree not only to work exclusively with the 


AGREEMENTS BETWEEN RAILROADS AND STEAMSHIP LINES. 255 

Liners Company on all trans-Atlantic export traffic through Mobile, 
but. unless compelled by legislative enactment or judicial decree to 
do otherwise, “ not to issue through bills of lading to points now 
covered by this agreement or hereafter added thereto by steamers 
from the port of INIobile other than the steamers operated by the 
Liners Company under this agreement,” and to give to the Liners 
Company “ first offers of trans-Atlantic cargo controlled by the 
railroads, should the same be shipped on local bills of lading to 
Mobile.” This railroad practice of issuing through bills of lading 
on shipments passing over their wharves only if shipped to Europe 
by steamers of a preferential line, was condemned by the Interstate 
Commerce Commission (Mobile Chamber of Commerce, et al. vs. 
Mobile & Ohio Railroad Co., et ah, I. C. C. 4242, May 7, 1912) 
as an attempt to coerce shippers into employing a particular water 
line and as an illegal discrimination against shippers. Following 
this decision those sections of the contract which provided for, (1) 
an exclusive working arrangement between the parties, and (2) the 
issuance of through bills of lading only by steamers operated by 
the Liners Company unless compelled by legislative enactment or 
judicial decree to do otherwise, were stricken from the contract, 
under date of October 30, 1912, and the following paragraph was 

inserted in lieu thereof: 

That so far as they lawfully may, or unless compelled by legislative enact¬ 
ment, order of the Commission or judicial decree to do otherwise, the rail¬ 
road companies agree, on all business through the port of Mobile, to work 
preferentially with the Liners Company in all matters of water transportation 
to the ports covered by this agreement or hereafter added thereto. 

A greements with reference to Port Arthur, 

With respect to this port the Texarkana & Fort Smith Railway Co 
and the Port Arthur Canal & Deck Co. (controlled by the Kansas 
City Southern Railway Co.) entered into an agreement on Septem¬ 
ber 15,1909, with the Port Arthur Texas Transatlantic Line. Accord¬ 
ing to the agreement the steamship line obligates itself to perform 
the following: 

1. To operate two steamers per month from Port Arthur 
to Liverpool during the season from October 31 to January 31; two 
per month from Port Arthur to Bremen; and during February and 
March a service of at least one steamer per month to Liverpool and 
a similar service to Bremen. Additional steamers to Liverpool and 


256 AGEEEMENTS BETWEEN KAILROADS AND STEAMSHIP LINES. 

Bremen must be furnished at all times throughout the year if the 
volume of traffic warrants, the object of the parties to the agreement 
being to develop the service by cooperating with each other to the 
fullest possible extent. The steamship line also agrees to furnish a 
service of at least one steamer per month to Hamburg, the total num¬ 
ber of sailings to be determined by the volume of traffic obtainable. 
Steamers must also be furnished to ports of the United Kingdom and 
Continental Europe other than Liverpool, Bremen and Hamburg 
whenever the cargo available justifies the sailings, both parties to 
the agreement having declared their intention, as far as may be found 
practicable, to develop services to all the chief ports in Europe, in¬ 
cluding the Mediterranean and Adriatic. 

2. Not to complete the loading of its steamers at any other 
ports when the railway company is in a position to promptly furnish 
sufficient cargo to complete the loading of the steamer at Port Arthur. 

3. To guarantee to the railway company (and this the 
railway company agrees to permit) ocean rates from Port Arthur 
to the various ports of destination not to exceed the current ocean 
rates from Galveston on the same classes of freight to the same ports 
of destination. 

In return for the above-mentioned facilities the Port Arthur Canal 
& Dock Co. agrees to allow the steamship line the exclusive use, free 
of charge, of certain of its wharves and other accommodations. The 
railway company agrees during the life of the contract not to make 
any other through arrangements for export traffic to European ports 
via Port Arthur except by the steamers of the contracting line; and, 
furthermore, not to issue through bills of lading for such traffic via 
the port except in connection with the contractiilg line’s steamers, 
unless legally compelled to do so or unless the steamship line either 
fails or declines to accept the freight. It is expressly stated that only 
under these conditions can the railroad company send cargo by other 
steamers or issue through bills of lading therefor. This agreement 
was extended by the parties to September 15, 1914. 

Agreements with reference to Pensacola and Port Aransas, 

Although no copy of the agreement was furnished, the manage¬ 
ment of the Louisville & Nashville Railroad Co. reported to the 
Committee that the railroad has a working arrangement at Pensa¬ 
cola with Flinch, Edye & Co. of New York, representing a number 
of steamship interests, whereby the latter firm provides ships to call 


AGREEMENTS BETWEEN RAILROADS AND STEAMSHIP LINES. 257 


at Pensacola for fortnightly sailings to Liverpool and sailings to 
Bremen, Havre, Spanish, Italian and Mediterranean ports as the 
trade warrants, and that no other lines call regularly at that port. 
Mr. Paul Gottheil, representing the firm of Punch, Edye & Co., 
testified that his firm has had such an arrangement with the Louis¬ 
ville & Nashville Railroad Co. for the last 18 years, the Liverpool 
service at present being operated by the Serra Line, the Mediter¬ 
ranean service by the Austro-Americana Steamship Co. and the 
Havre and Bremen service being an irregular one governed by the 
movement of cotton, (vol. 1, p. 366). Mr. Gottheil further testified 
that Punch, Edye & Co. recently entered into an agreement with the 
Aransas Channel & Dock Co. for the opening and development of 
Port Aransas in Texas. This agreement, he stated, is similar to other 
agreements, providing for tonnage necessary to carry the traffic mov¬ 
ing and “ is on all fours with what has been done and is being done 
to-day when a new port or a new service is opened.” (vol. 1, p.^366.) 

Agreements with Reference to Trans-Pacific Steamship Lines. 

As was fully explained in the section on “Agreements in the 
American-Asiatic Trade,” nearly all the trans-Pacific lines operating 
from San Prancisco and northern Pacific coast ports have efi:ected 
traffic agreements ^ with the leading American transcontinental 
railways. In about half of the instances these agreements, as fur¬ 
nished to the Committee, make provision for an exclusive working 
arrangement between the ocean carrier and the railroad system as 
regards traffic to and from the Par East. As supplementing the 
• discussion ^ of these agreements the text of the same is reproduced in 

1 These agreements are fully explained on pages 145-152 of the chapter dealing with 
“Agreements in the American-Asiatic Trade ”, and need not again be considered in detail. 
The steamship agreements or understandings with railroads discussed in the foregoing 
pages are the following :— ' 

AGREEMENTS BETWEEN STEAMSHIP LINES AND RAILROADS. 

Names of contracting steamship lines. Names of contracting railroads. 


Pacific Mail Steamship Co. 

Toyo Kisen Kaisha. 

Great Northern Steamship Co. 
Osaka Shosen Kaisha. 

China Mutual Steamship Co. 1 
Ocean Steamship Co. j 

Bank Line. 


Southern Pacific Co. 

Atchison, Topeka & Santa Fe Railway Co. 
Western Pacific Railway Co. 

Great Northern Railway Co. 

Chicago, Milwaukee & St. Paul Railway 
System. 

Great Northern RailA^ay Co. 

Northern Pacific Railway Co. 

Reports no agreement. 


25655 °— VOL 4—14 


17 





258 AGREEMENTS BETWEEN RAILROADS AND STEAMSHIP LINES. 

whole or in part under Exhibit IV of this chapter (p. 271). The 
discussion of these agreements in the previous section rather 
than here was due to the desire (as stated) to show that “ when these 
agreements are considered in conjunction with the agreements and 
conference arrangements existing between the steamship lines them¬ 
selves, it is apparent that the regular trans-Pacific lines occupy a 
strongly entrenched position from a competitive point of view^ as 
compared with independent water carriers which have no such 
steamship conference or railroad connections.” 



EXHIBITS. 


\ 

TRAFFIC AGREEMENTS BETWEEN AMERICAN RAILROADS AND 

FOREIGN STEAMSHIP LINES. 

EXHIBIT I.—Agreement Between the Boston & Maine Railroad Co. and 
the Hambnrg-American Line, with Reference to the Service Between 
Boston and Hamburg. 

THIS AGREEMENT made and entered into on this thirteenth day of June, A. D., one 
thousand nine hundred and one, by and between the Hamburg-American Line, a corpora¬ 
tion legally established, through its agents, Messrs. Patterson, Wylde and Company of 
Boston, of the first part, and the Boston & Maine Railroad, a corporation established by 
the laws of the Commonwealth of Massachusetts, in the United States of America, of the 
second part, WITNESSETH : 

That whereas the party of the first part is in the management of a line of steamers, 
trading under the name of the Hamburg-American Line, and the party of the second 
part is the owner and manager of the Mystic Wharf at Boston, in said Commonwealth, 
it is hereby agreed by and between the parties hereto as follows: 

FIRST : The party of the first part agrees to send steamers to the Mystic Wharf to 
ply between said docks and Hamburg, Germany, sufficient to run regularly not less often 
than twice during each calendar month. 

SECOND : The party of the second part agrees not to furnish the use of its wharves 
and docks to steamers of other parties plying between Boston and Hamburg excepting 
therefrom steamers carrying grain only. If increase of service is found to he necessary 
it must be mutually agreed to. 

THIRD : The party of the first part agrees in soliciting and engaging cargo for the 
several boats so sailing from said Mystic Wharf to give the preference, as far as prac¬ 
ticable, to cargo to be furnished for shipment through the party of the second part, 
the intention being to give the party of the second part a preference in this respect. 

FOURTH : The party of the second part agrees to furnish proper accommodation for 
said steamers at said wharf, to dredge sufficiently alongside and adjacent to the said 
wharf, and to maintain sufficient depth up to twenty-eight (28) feet below mean low 
water, to bring safely alongside and berth fully laden and always afloat such steamers 
of the party of the first part as may be at said docks; to provide necessary wharfage 
room free of charge and cars for cargo that may be received for-shipment outward or 
received inward from said steamers, and to render the usual facilities for the proper 
conduct of such traffic. 

FIFTH : The party of the second part hereby agrees that it will solicit and canvass for 
such traffic for the Hamburg-American Line through its respective agents wherever 
the same may be stationed at the principal cities of the United States and Canada as 
may be desirable and profitable to the parties hereto, in the same manner as it now 
solicits and canvasses for other steamers docking at said wharf, and will furnish to 
the party of the first part as low inland rates as it furnishes to any other line of 
steamers plying from said wharf. The party of the first part hereby agrees to solicit 
and canvass for traffic for and over the Boston & Maine Railroad at points where the 

259 


260 AGREEMENTS BETWEEN RAILROADS AND STEAMSHIP LINES. 


party of the first part has established agencies. The party of the second part also 
agrees to use its best endeavors to cause the freight agents of its various connections to 
solicit traffic and engage freight at equal ocean rates for the Hamburg-American Line 
steamers; the intention and meaning of this agreement being that the joint service shall 
be thoroughly performed so as to promote and encourage such joint business to the 
mutual profit and interest of the parties hereto. 

SIXTH : The inland rates from points in the Western States on export freight from the 
port of Boston shall never exceed the tariff rates from similar points by the fast freight 
lines from the port of New York, and the Boston & Maine Railroad will join Western 
Roads in meeting competitive rates on eastbound tonnage. 

SEVENTH : The party of the first part agrees that during the continuance of this agree¬ 
ment all steamers, if any, managed or controlled by it from time to time and regularly 
employed in the trade between the ports of Boston and Hamburg shall dock at said Mystic 
Wharf, and not elsewhere within the port of Boston. In case said wharf shall at any 
time during the currency of this agreement be wholly or partially destroyed or rendered 
unfit for the purposes intended, then this agreement shall be suspended and of no effect 
until it is again reinstated in proper working order and condition, and it is understood 
and agreed that the Boston & Maine Railroad shall complete all necessary repairs with 
all possible dispatch. 

. EIGHTH : This agreement is not to prevent the use by the party of the first part 
of other inland carriers for any freight between Boston and points not reached by the 
party of the second part, or its connections, for export freight from any points whatever, 
the parties of the first part to be at liberty to engage cargo where desirable by them, 
but the spirit of this agreement being that the preference in booking east-bound cargo 
shall be given to the party of the second part. 

NINTH : In the event of ocean competition to the party of the first part between Boston 
and Hamburg being instituted from wharves of other railroads terminating at Boston 
the party of the second part shall cooperate with the party of the first part in meeting 
such competition. 

TENTH : If at any time it shall be necessary for the party of the second part to work 
the grain elevator over-time to complete the loading of a vessel at the request of the 
party of the first part, and the cause for such over-time is the fault of the party of the 
second part, such over-time shall be rendered free of charge ; otherwise it shall be paid 
for by the party of the first part. The question whether the over-time is the fault of 
the Railroad Company shall be fairly adjusted between the agents of the parties to this 
agreement. 

ELEVENTH ; This agreement shall go into operation on the first day of July A. D., 
one thousand nine hundred and one, and shall remain in force during the term of one 
year from the said last named date, subject thereafter to termination by three (3) 
months’ notice in writing by one party to the other. 

In Witness Whereof the parties hereto have caused this agreement to be executed on 
the day and year first above written. 

Executed and delivered in presence of— 

Boston and Maine Railroad, 

Signed By A. S. Crane, [ss.] 

Export Freight Traffic Manager, 

Witness : 

J. H. Farnham. 

Hamburg, IS July, 1901. 

Hambdrg-Amerika Line, 

Signed By G. Wolff. 

Witnessed by— 

Hoberstein, 


AGREEMENTS BETWEEN RAILROADS AND STEAMSHIP LINES. 261 


Boston and Maine Railroad, 

Traffic Department, 

Boston, March 28,1912. 


Mr. W. G. SiCKEL, 

Asst, to General Manager, Hamburg-American Line, 

M Broaduay, Aeic York City. 

Dear Sir : I duly received your valued favor of the 18th inst, and have carefully 
noted contents. 

It is understood that If the Hamburg-American Line established a line of steamers 
suitable for handling passengers and freight between the New Haven terminals at South 
Boston and Hamburg, Germany, that the Boston & Maine Railroad will not construe 
same as being a violation of the contract between your Company and the Boston & 
Maine Raliroad. 

If the establishment of the service from the New Haven terminals should affect the 
volume of freight from the Boston & Maine terminals to such an extent as to cause a 
reduction of the present fortnightly service, we reserve the right to request the Hamburg- 
American Line to either entirely vacate Boston & Maine terminals or to reduce the 
space now allotted to accord with the volume of business offered, but in either case 
Boston & Maine Railroad agrees not to make a traffic agreement from Boston nor to 
grant accommodations at Boston & Maine terminals to any other line of steamers 
between Boston and Hamburg, Germany, full cargoes of grain excepted. 

The Boston & Maine Railroad is not prepared to grant the request of the Hamburg- 
American Line that ships using the Boston & Maine Mystic Wharf terminal, shall be 
allowed at the pleasure of the Hamburg-Ameriean Line to touch at the New Haven 
terminal, hut the Boston & Maine Railroad has no objection to the ships of the Hamburg- 
Ameriean Line using the New Haven terminal coming to the Boston & Maine Railroad 
terminal at the pleasure of your people, whenever you find it for your interest to do so. 

I have stated to I’resident Mellen that in order to accommodate at Mystic Wharf 
the large boats of the Hamburg-Ameriean Line that will be used in connection with the 
service to and from the New Haven terminals, additional dredging will have to be 
done by Boston & Maine Railroad from the main channel to alongside and adjacent to 
the wharf in order to maintain sufficient depth up to 32 ft. 8 in. below mean low water 
and he has signified his willingness to have the necessary dredging done. 

It is also understood that in view of the prospective arrangement with the New 
Haven Railroad, the preferential treatment to be accorded the Boston & Maine Railroad, 
as covered by Clauses 3 and 8 of the Agreement of June 13, 1901, will be amended so 
as to include the New Haven Railroad. 


Yours truly, 


V ice-President. 


EXHIBIT II.—Agreement, dated the 1st day of July, 1908, between the 
United States Shipping Co., on behalf of the Hamburg-Ameriean Line, 
hereinafter called the Steamship Co., of the. one part, and the Chesa¬ 
peake & Ohio Railway Co., the Norfolk & Western Railway Co., and 
the Southern Railway Co., in the United States of America, hereinafter 
called the railways, of the other part. 

Whereas the parties hereunto have agreed to enter into this agreement, now these 
presents witness, and it is hereby agreed and declared, as follows: 

(1) The Steamship Co. shall, either with their own or other steamers, stanch, tight, 
and strong, rated at 100 A1 at British Lloyds, or equivalent thereto, and suitable in 




262 AGKEEMENTS BETWEEN KAILROADS AND STEAMSHIP LINES. 


every respect for the traffic, establish and maintain for a period of five years from the 
1st day of October, 1908 (hereinafter referred to as the period of working), subject as 
hereinafter mentioned, regular sailings from Newport News and/or Norfolk, in the United 
States of America, to Hamburg, Germany, and vice versa, in such manner that there 
will be ample, regular, and reasonably sufficient service between said ports for the pur¬ 
pose of carrying all suital^le goods, wares, and merchandise exported from the United 
States or imported into the United States via the ports of Newport News and/or Norfolk 
over the systems of the railways. 

(2) The railways will, as long as regular, satisfactory, and efficient service is fur¬ 
nished as aforesaid by the Steamship Co., guarantee that all goods, wares, and merchan¬ 
dise of every description passing over their systems to Newport News and/or Norfolk 
for export to Hamburg shall be shipped at Newport News and/or Norfolk aforesaid in 
steamers to be provided by the Steamship Co. as aforesaid, in so far as it is in the power 
of the railways to control the same. 

(3) As regards all goods, wares, and merchandise exported from Newport News and/or 
Norfolk as aforesaid, the rates of freight to be paid the Steamship Co. shall he the same 
as the accepted rates from Baltimore at the time at which the freight routed through 
Newport News and/or Norfolk is engaged, but the rates on grain, cattle, and cotton to 
be agreed upon mutually from time to time without regard to the rates ruling from 
Baltimore. 

It is agreed that the rates from Newport News and Norfolk shall at all times be on 
a parity with the rates made by the Steamship Co. by its more northern services, irre¬ 
spective of the rate from Baltimore, but with due regard to the class of cargo required 
by the steamers. It is also furthermore agreed that cargo contracted for by the Steam¬ 
ship Co. shall be routed as far as the Steamship Co. can control it through the ports of 
Newport News and Norfolk in fair proportion to the Steamship Co.’s other service. 

Lumber and cotton emanating from local stations on the railways may command a 
Higher ocean rate, but the combined inland and ocean rate shall not exceed the through 
rate via Baltimore. 

In the case of grain, cattle, cotton, lumber and other cargo peculiar to the South, the 
Steamship Co. in making rates from Newport News and/or Norfolk will have every 
possible regard for the competition prevailing through north and south Atlantic and 
Virginia ports, it being distinctly understood and agreed that all freight engagements 
made by the railways will be reported to and are subject to confirmation of the Steam¬ 
ship Co. 

It is furthermore agreed that the Steamship Co. will take a reasonable quantity of 
grain when obtainable by each steamer other than extra steamers put on for a full 
cargo of special freight. 

As regards all goods, wares, and merchandise imported into Newport News and/or 
Norfolk and covered by through rates to any point in the United States of America, the 
rates of inland freight shall be no higher than the Baltimore inland all-rail rates of 
freight for the time being current and accepted by the railway lines from Baltimore in 
respect of similar classes of goods, wares, and merchandise. 

The Steamship Co. agrees that as regards all goods, wares, and merchandise imported 
into Newport News and/or Norfolk, the ocean rates of freight shall be no higher than 
the rates at the time being current and accepted by the Steamship Co.’s lines running 
from Hamburg to either Philadelphia or Baltimore for similar classes of goods, wares, 
and merchandise for same territories of destination. 

(4) The railways and the Steamship Co. will use their best efforts to extend, promote, 
and improve the export and import traffic through Newport News and/or Norfolk. 

(5) The railways will, during the continuance of the period of working, at all times 
afford the Steamship Co. at Newport News and/or Norfolk every reasonable accommo¬ 
dation and facility in their power for the reception, conveyance, and delivery of all traffic 


AGREEMENTS BETWEEN RAILROADS AND STEAMSHIP LINES. 2G3 


from the Steamship Co, to the railways, and will convey such traffic on the railways’ 
systems in a proper, safe, and convenient manner so as to fully develop the traffic of the 
Steamship Co., and from time to time will run proper and sufficient trains thereon in 
convenient connection with said lino of steamships, and will from time to time (free of 
charge) solicit freight traffic for the Steamship Co., and duly perform their duties in 
that behalf in the United States of America. 

(6) The Steamship Co. will convey all traffic on the Steamship Co.’s ships in a proper, 
safe, and convenient manner, upon the terms and subject to the exceptions and condi¬ 
tions of the ocean bill of lading from time to time in use by the Steamship Co., and will 
guarantee that no higher than the Baltimore rates of insurance will be charged on such 
traffic, so as to fully develop the traffic on the railways, as well as the traffic of the 
Steamship Co. 

(7) During the period of the continuance of this agreement: 

(a) The railways shall deliver all traffic for the Steamship Co. on their wharves, or 
by barges alongside the steamships, and shall receive all traffic from said Steamship Co. 
upon said wharves or barges, the Steamship Co. delivering and receiving as*usual on the 
wharves or barges. 

(b) The railways agree to furnish the Steamship Co at Newport News and/or Norfolk 
free berth room for their steamers operated under this agreement, and further agree 
to accord to the Steamship Co. free wharfage, both inside and outside, on all freight 
handled by the Steamship Co, under this agreement at the wharves of the railways 
when such wharfage would otherwise be borne by the Steamship Co. 

(c) It is understood that on account of the steamers usually having import cargo they 
will proceed to Newport News first, there discharge and take on cargo, and when in 
readiness proceed from Newport News direct to Pinners Point to the terminals of the 
Southern Railway, the Norfolk & Western Railway to barge its cargo to the steamers. 
Any cargo arriving over the Chesapeake & Ohio Railway for a steamer after her departure 
from Newport News to be barged to the steamer at the port of Norfolk at the expense 
of the Chesapeake & Ohio Railway. 

id) The Steamship Co. to take charge of all the eastbound freight as soon as taken 
hold of by the vessels’ tackle and to be then and there responsible to the railways for 
the inland freight and charges accrued. Where the delivery of freight is made by lighter, 
the Steamship Co. to take same from the lighter alongside the steamer. The handling 
of freight to be at the expense of the Steamship Co., but its responsibility as to freight 
and accrued charges thereon to begin only as soon as taken hold of by vessels’ tackle. 
The Steamship Co. agrees to use its best endeavors to facilitate the quick dispatch of the 
lighters delivering freight alongside steamers. All inland freight and charges to be 
paid after sailing of the steamers upon rendering of the account, allowing the Steam¬ 
ship Co. one week thereafter for examination. 

The railways to take charge of all the westbound freight as soon as delivered on 
their wharves and to be then and there responsible to the Steamship Co. for the ocean 
freight and charges accrued, and such ocean freight and charges accrued to be paid upon 
rendering of the account, allowing the railways one week thereafter for examination, 

(e) Bills of lading issued to and from the various places in the United States of 
.\merica shall contain only the usual clauses and with no unusual provisions which 
may deter or injure business. 

if) The railways shall make no charge to the Steamship Co. for American soliciting 
agents, and the Steamship Co. shall make no charge to the railways for compensation 

or other expenses of its agents in America or in Europe. 

(8) The railways agree to pay any claims for overcharge, loss, or damage for which 
they may be legally liable. The Steamship Co. agrees to pay any claims for overcharge, 
loss, or damage for which it may be legally liable and to adjust any such claims as 
may be shown are customary for other steamship services in competition with it to adjust. 


2G4 AGREEMENTS BETWEEN RAILROADS AND STEAMSHIP LINES. 


(9) Nothing herein contained, nor anything done by or on behalf of the said com¬ 
panies, or either of them, shall constitute or create, or be deemed to constitute or 
create, any partnership between the said companies. 

(10) In case of any difference or dispute arising under this agreement, such difference 
or dispute to be submitted to arbitration at New York, each party to select one arbitrator, 
and the two so chosen to select a third, the decision of two or more of such arbitrators 
to be final. 

(11) The railways shall use their best efforts to secure the cooperation of the Seaboard 
Air Line Railway and the Atlantic Coast Line Railroad in delivering to the vessels of 
the Steamship Co. all the export freight they control via Norfolk destined to Hamburg 
and Baltic ports. 

(12) Either party to this agreement has the privilege of canceling same at any time 
after 12 months from the date hereof by giving at least 6 months’ advance notice to the 
other party in writing of its intention to cancel, but such notice not to be given prior to 
July 1, 1909. Any such notice can he given to the railways by being addressed to the 
Chesapeake &> Ohio Railway Co., at its head office at Richmond, Va. ; the Norfolk and 
Western Railway Co., at its head office at Roanoke, Va.; the Southern Railway Co., at 
its head office at Washington, D. C.; or such notice may be given by the railways by 
being addressed to The United States Shipping Co., at New York, N. Y., as representative 
of the Steamship Co., by registered letter. 

(13) It is further agreed that a notice of cancellation as provided for by this agree¬ 
ment by any one of the railways does not abrogate the agreement as to the remaining 
parties. 

(14) In case Germany should be involved in a war by which the German fiag should 
not he neutral, and it is not possible to obtain substitute tonnage under a neutral flag, 
the service shall be suspended during the period of such hostilities. 

In witness whereof the parties hereunto have set their hands and seals the day and 
year first above written. 

The United States Shipping Co., 

By-. 

On behalf of the Hamburg-American Line. 

The Chesapeake & Ohio Railway Co., 

By-. 

Norfolk & Western Railway Co., 

By- 

Southern Railway Co., 

By-. 


EXHIBIT III.—A^eement Between the Munson Steamship Line and the 
Mobile & Ohio and Southern Railroad Companies (Dated May 13, 1912 
and Amended October 15, 1912), Relative to the Steamship Service 
Between Mobile and South American Ports. 


THIS AGREEMENT, made and entered into in triplicate this 13th day of May, 1912, 
by and between 

MUNSON STEAMSHIP LINE, a corporation incorporated under the laws of the State 
of New York, party of the first part, hereinafter called “STEAMSHIP LINE,” and the 
MOBILE & OHIO RAILROAD COMPANY, a corporation created and existing under 
the laws of the State of Alabama, party of the second part, hereinafter called “ MOBILE 
& OHIO,” and the 











AGREEMENTS BETWEEN RAILROADS AND STEAMSHIP LINES. 265 


SOUTHERN RAILWAY COMPANY, a corporation created and existing under the laws 
of the State of Virginia, party of the third part, hereinafter called “ SOUTHERN RAIL¬ 
WAY,” WITNESSETH: 

That, for the purpose of encouraging and upbuilding commerce between the port of 
Mobile, Alabama, and the port of Buenos Ayres and such other South American ports as 
may be agreed upon, and in consideration of the mutual benefit of the parties hereto to 
be derived herefrom and in consideration of the covenants of the parties herein expressed, 
the parties do contract and agree as follows: 

I. The Steamship Line obligates and binds itself to furnish steamship service between 
Mobile, Alabama, and ports of South America as provided herein ; that is to say, within 
six (6) months from the date of this contract to inaugurate at least a monthly service 
between the ports of Buenos Ayres and Mobile, and to increase the frequency of such 
service as fast as the volume of traffic warrants; and to install steamer service between 
such other ports of South America and Mobile as may be agreed upon between the parties 
hereto as soon as practicable after such agreement and whenever the volume of traffic 
warrants the inauguration of such further service. 

II. The Mobile & Ohio agrees to work exclusively with the Steamship Line in all 
matters of water transportation in territories outlined in Article I hereof. 

The Southern Railway agrees to work exclusively with the Steamship Line on all 
matters of water transportation in territories outlined in Article I, on business through 
the I*ort of Mobile. 

The Steamship Line agrees to do all in its power to stimulate and increase the traffic 
over the lines of the railroads aforesaid and to put the route to be installed hereunder 
on a competitive basis with like traffic via other ports as to ocean rates, in so far as it 
reasonably can. 

The Steamship Line agrees not to put on a steamship service to or from other Gulf 
ports to Buenos Ayres, or other South American ports, to which service may be operated 
under this agreement, without the written consent of the Railroad Companies aforesaid, 
except for the carriage of lumber and/or its products, or other freight which must be 
loaded at other ports in order to meet competition of other water carriers. This not to 
be construed as according any privilege to the Steamship Line to take cargo at other 
Gulf ports which reasonably can be loaded at Mobile, or be shipped via Mobile. 

The Railroad Companies aforesaid agree to do all in their power to aid and expand 
the traffic from the territory served by them over the lines of the Steamship Line, as ^ 
herein established. 

III. All three parties to this agreement shall have the right severally to quote a com¬ 
bined rate for the through route on traffic moving between points reached by the Mobile 
& Ohio and the Southern Railway, or their connections, and points reached by the service 
of the Steamship Line hereunder. The combined rate so quoted for a through movement 
under through bill of lading shall be the published tariff rate of the Mobile & Ohio and 
the Southern Railway in effect at the time of the movement covering the inland rail haul 
to or from the Port of Mobile, or to or from point of origin to the port, plus the rate 
of the Steamship Line to or from the Port of Mobile. The rate of the Steamship Line 
so quoted to be such rate as the Steamship Line may, from time to time, through its 
proper officers, authorize the Mobile & Ohio and the Southern Railway to quote. 

IV. It is understood that the representatives of the Mobile & Ohio and the Southern 
Railway will advise the agents of the Steamship Line at Mobile of all contracts for ton¬ 
nage via the Steamship Line, and will, at all times, furnish the New York office of the 
Steamship Line with copies of such of its tariffs as contain rail rates then in effect to 
be used in making the combined rate on through business under this contract. 

V. It is mutually agreed that all freight charges upon southbound cargo shall be col¬ 
lected in advance by the Mobile & Ohio and the Southern Railway through to destination, 
and that the Mobile & Ohio and the Southern Railway shall pay to the Steamship Line, 


266 AGREEMENTS BETWEEN RAILROADS AND STEAMSHIP LINES. 


through its Agents at Mobile, its proportionate part of the combined freight rate within 
five (5) days following the sailing of each vessel from the Port of Mobile. 

Upon all northbound cargo, the Mobile & Ohio and the Southern Railway, provided the 
freight delivered them is of value sufficient to cover both the rail and water freight 
charges thereon, shall pay the Steamship Line its freight charges when said cargo is 
delivered by the Steamship Line to the Railroad Companies at the Port of Mobile, where 
through freight is collectible by the Railroad Companies at ultimate destination; the 
Steamship Line is to pay to the Railroad Companies their freight charges within five (5) 
days of the delivery of the freight to the Railroad Companies, where the Steamship Line 
collects in advance the freight charges to final destination at point of origin. 

VI. (a) The Mobile & Ohio and the Southern Railway agree to give to the steamers 
of the Steamship Line, free of charge, the exclusive use of the entire two-story pier 
Numbered 3, joint property of the two Railroad Companies named as second and third 
parties to this agreement, as the same is now completed and served; said pier being 
located at the foot of Adams Street, and between Congress and Lipscomb Streets, in the 
City of Mobile, Alabama. Said pier to be placed at the disposal of the Steamship Line 
within fifteen days from the date of this contract, unless prevented by the Act of God, 
storms, hurricanes, strikes, or other causes beyond the control of the owning Railroad 
Companies. 

This Pier No. 3 shall be .used by the Steamship Line for traffic covered by this Agree¬ 
ment and for traffic covered by the Agreement between it and the Mobile & Ohio Rail¬ 
road. dated November 11, 1905, covering the handling of Cuban and West Indian traffic. 
And under Article VII of the said contract of 1905, the Steamship Line was given the 
exclusive use of that Mobile & Ohio Pier heretofore known as Pier No. 4, and that part 
of said Agreement of 1905 which set aside said Pier No. 4 for use of the Steamship Line 
is to stand abrogated and superseded on completion of Pier No. 3, the exclusive use of 
which is herein given to the Steamship Line. All other parts of the said Agreement 
of 1905 to remain in full force and effect, except where in confiict with the operation of 
Pier No. 3 under this contract. 

The term “ exclusive use ” is understood to mean that the Steamship Line is to have 
the absolute use of said Pier No. 3 in regard to storage space and space for handling 
cargo and berthing space, so long as it maintains the minimum regularly established 
service as provided for by this contract, and also as provided for by the traffic agreement 
between the said Steamship Line and the Mobile & Ohio Railroad Company under date 
of November 11, 1905. 

If, however, the Steamship Line shall restrict or temporarily withdraw any of the 
said regularly established services then the Railroad Companies owning said Pier No. 3 
shall have the right to use such portions of said pier as may not be in use by the 
Steamship Company for other steamships. Said right on the part of the owning Rail¬ 
road Companies to use the space not needed by the Steamship Line is to be so exercised 
as not to interfere in any manner with the expeditious handling of the business of the 
Steamship Line. 

(b) The Steamship Line shall have the right to erect, under the approval of the own¬ 
ing Railroad Companies’ Engineer, and operate labor-saving appliances and/or machinery 
at its own expense for the handling of freight, either on the pier or between the pier 
and steamer, these appliances to be recognized as the property of the Steamship Line 
during the life of this contract. The owning Railroad Companies agree in case of the 
termination of this contract to permit the Steamship Line to remove all appliances when 
so desired. 

The owning Railroad Companies will purchase from the Steamship Line said appliances 
and/or machinery when so agreed before their erection at an appraised value which shall 
be decided upon by a Board of Survey, consisting of one representative appointed by the 
owning Railroad Companies, one representative appointed by the Steamship Line, and 


AGREEMENTS BETWEEN RAILROADS AND STEAMSHIP LINES. 267 

the third representative appointed hy the first two appointees, all of which are to be 
men experienced in matters of this kind. 

(c) In the event the Steamship Line erects or operates labor-saving appliances and/or 
machinery, as per paragraph (b), the Steamship Line shall have the right upon three 
months’ notice to the Mobile & Ohio and the Southern Railway to furnish and pay for 
all the labor and cost for discharge or loading of railroad cars on the pier or piers 
allotted to the use of the Steamship Line, the Mobile & Ohio and the Southern Railway 
agreeing, where the duty is upon them to load or unload said cars, to pay said Sleamship 
Line for such service such rate per car or per ton as may be mutually agreed upon, equal 
to an amount ten per cent (10%) less than the actual average cost of this operation to 
the Mobile & Ohio and the Southern Railway, to be determined by the actual figures 
showing cost to the Mobile & Ohio and the Southern Railway for the performance of 
equal service for a period of three (3) months prior to the Steamship Line assuming the 
work of the loading and discharging of the cars, or such other time as may be mutually 
agreed upon as fairly covering present cost. 

It is understood that the Mobile & Ohio and the Southern Railway shall furnish 
Inspectors who shall pass upon the work of the loading of each car when this service is 
performed by the Steamship Line, and the Mobile & Ohio and the Southern Railway shall 
assume the responsibility for condition of cargo loaded in the cars after their inspector 
has passed upon same as being loaded to his satisfaction. 

(d) The Mobile & Ohio and the Southern Railway agree to provide in so far as may be 
reasonably within their powers so to do, such additional pier room and facilities for the 
steamers of the Steamship Line should the pier named in this contract prove to be inade¬ 
quate for the volume of traflBc and for the quick despatch of the steamers which may he 
handled by the Steamship Line. 

(e) The Mobile & Ohio and the Southern Railway agree to maintain said Pier No. 3 
and superstructure in thorough repair and in a thoroughly efiBcient condition, and to 
maintain sufficient depth of water in the berths of said pier and approaches to same from 
the channel as will accommodate the steamers of the Steamship Line ; but no liability 
shall attach under this article for damage because of pier or superstructure being out of 
repair or because of lack of sufficient water unless written notice of the repairs needed 
or of the inadequate depth of water be, prior to that time, given the Mobile & Ohio and 
the Southern Railway by the Steamship Line and a reasonable time shall have elapsed 
for the remedy thereof. 

(f) The Steamship Line agrees to load and discharge all classes of cargo both outbound 
and inbound at said pier or piers, solely excepting the Yellow Pine business southbound, 
on which traffic the Steamship Line’s steamers may load at any pier or place in the 
harbor of Mobile to suit its convenience and the exigencies of the traffic. 

The Steamship Line as Agent of the ship or in its own name, will acknowledge posses¬ 
sion, by giving receip<- therefor for all cargo received from Mobile proper, or received 
from transportation lines not party to this agreement, upon said freight being unloaded 
or placed on the docks leased hereunder, and the Steamship Line’s possession, as Agent 
of the ship or in its own behalf of all cargo delivered by it to Mobile proper or delivered 
by it to transportation lines not a party to this agreement, shall continue upon the same 
being unloaded or placed on the pier leased hereunder, until the Steamship Line receives 
receipt therefor from consignee, or transportation line not a party to this agreement. 

VII. That the Steamshiii Line, in the interchange of traffic with other railroads at 
Mobile, shall in no way discriminate against the Mobile & Ohio or the Southern Railway; 
it being understood and agreed that the Steamship Line shall observe the routing instruc¬ 
tions on traffic as may be given by shippers or consignees to the Steamship Line and/or 
filed with any of the Railroad Lines, and the Steamship Line is to observe a neutral 
position on unrouted business having due regard for territorial locations, either as to 
points of origin or destination in the United States, both on import and expoit traffic, 
and that on unrouted northbound business the Steamship Line may divide such business 


268 AGREEMENTS BETWEEN RAILROADS AND STEAMSHIP LINES 


between its connections as nearly as possible according to the percentage of southbound 
freight delivered to the Steamship Line by the Railroads. 

The Steamship Line shall not enter into any traffic contract with other rail lines at 
Mobile without the approval and consent of the Mobile & Ohio and the Southern Railway. 

VIII. That this contract shall continue in effect for a period of ten (10) years from 
September 15, 1912, and thereafter subject to cancellation by either party to this contract 
by giving six (6) months’ written notice. 

IX. If after the institution by the Steamship Line of any service called for in Article 
I, of this contract, it shall be found that, for want of business, or because of epidemic, 
quarantine regulations, or other like or different hindrances to the operation of steamers, 
such service can not be maintained except at a loss, the Steamship Line shall have the 
right upon ninety (90) days’ notice upon showing that said service is done at a loss, to 
modify or discontinue the same so long as the hindrances prevail. 

X. It is mutually agreed that the liability for any loss, damage, or delay, occurring to 
property in transit, shall be assumed by the Company having possession of the property 
at the time such loss, damage, or delay occurs. It is further understood that concealed 
loss or damage occurring in transit wcich was not apparent upon delivery to or receipt 
from the Steamship Line at Mobile, and which the carriers may be compelled to assume, 
shall be divided as between the Steamship Line and the Mobile & Ohio and/or the 
Southern Railway on the basis of revenue, it being understood that agents of both parties 
at the docks at Mobile shall make joint check and tally showing the condition and quan¬ 
tity of the property when unloaded from the cars, and from the steamers, such joint 
exceptions and tallies to be filed with representatives of the Steamship Line and the 
Mobile & Ohio and the Southern Railway at Mobile. 

It is further understood and agreed that the liability of the Mobile & Ohio and the 
Southern Railway as carrier for property handled under this contract, shall be limited as 
follows: The liability of the Mobile & Ohio and the Southern Railway as carriers shall 
cease upon the delivery of southbound cargo alongside vessel of the Steamship Line, or 
on the said Pier No. 3, at Mobile accessible to such vessel when, in each instance, re¬ 
ceipted for by the Steamship Line. The Steamship Line is to give the Mobile & Ohio or 
the Southern Railway said receipt for freight to be loaded direct from cars to ship when 
said cars are placed alongside of the vessel to receive the freight, and is to give said 
receipt for freight unloaded on warehouse or pier fioor when the Steamship Line’s ser¬ 
vants or agents take such freight from said floor and puts it on trucks or moves the 
said freight en route to the ship to receive it. After the execution of such receipt the 
Steamship Line's responsibility as carrier shall begin. The liability of the Steamship 
Line as carrier shall cease upon delivery of northbound cargo on the docks at Mobile 
as soon as the same has been receipted for by tbe Mobile & Ohio and the Southern Rail¬ 
way, after which time the responsibility of the Railroad Companies as carriers shall 
begin. 

XL The Mobile & Ohio and the Southern Railway agree that on all cargo received from 
or delivered at Mobile proper, or received from or delivered to transportation lines not 
parties to this agreement and handled over the docks of the Mobile & Ohio and Southern 
Railway for vessels of the Steamship Line, wharfage, storage or other charges provided 
by the Mobile & Ohio and Southern Railway’s published tariffs, shall be assessed and the 
Steamship Line guarantees to collect said charges and to settle with the Railroad Com¬ 
panies for the cargo of each vessel five days after the vessel carrying the cargo sails 
from Mobile. This clause is also operative on all cargo received by vessels of the Steam¬ 
ship Line from water or slips or from barges in slips of the Mobile & Ohio and the 
Southern Railway except in such cases as from time to time may be mutually agreed 
upon. 

That on all cargo delivered to or received from the Steamship Line by the Mobile & 
Ohio and Southern Railway under contracts for freight executed by the parties to this 


AGREEMENTS BETWEEN RAILROADS AND STEAMSHIP LINES. 269 


agreement, wharfage, storage or other charges covered by tariff of the Mobile & Ohio and 
Southern Railway, if assessed, shall he provided for in the rail rates and are not subject 
to the provisions of this Article. 

XII. Any matter of difference which may arise between the parties to this contract, 
depending upon the construction or effect of these Articles of Agreement, or any of them, 
which can not be amicably adjusted, may, on demand of either party, be submitted to 
three disinterested parties, experienced in matters of such kind, as arbitrators. The 
party demanding such arbitration shall give to the other party notice in writing of such 
demand, stating specifically the question to be submitted for decision, and naming a per¬ 
son who has the required qualifications to act as one arbitrator. If at the expiration of 
ten (10) days from the receipt of such notice, the party receiving it has not notified the 
party demanding the arbitration of its nomination of a second arbitrator, having like 
qualifications, the party making the demand may make such selection. The first and 
second arbitrators so elected shall select a third. When the board is completed, the 
arbitrators shall name a'day and place for the hearing, of which the parties shall be 
severally notified. If the two arbitrators first chosen shall be unable to agree upon a 
third arbitrator, such third arbitrator may be appointed, upon ten (10) days’ notice, on 
motion of either party, by the Judge of the United States District Court for the Southern 
District of Alabama. The decision of award of the said arbitrators, or a majority of 
them, shall be made in writing, after hearing the testimony and arguments, which may 
be submitted by either party who shall have attended, in compliance with a notice given 
as above required, and shall be final and binding upon the respective parties hereto, and 
each party hereby agrees to be conclusively bound thereby. 

Where the differences exist between the Mobile & Ohio and the Munson Steamship 
Line, these two interests shall constitute the parties as provided for by the text as 
written. 

Where the differences exist between the Southern Railway and the Munson Steamship 
Line, these two interests shall constitute the parties as provided for by the text as 
written. 

Where the matter of difference exists between the Mobile & Ohio and the Southern 
Railway as representing jointly one side of the controversy, and the Munson Steamship 
Line the other, then the Mobile & Ohio and the Southern Railway shall be constituted 
as a single party and the clause he operative as per wording of the text. 

XIII. It is mutually understood and agreed that the acts of God, and of Rulers, perils 
of the sea, errors of navigation, epidemics, quarantine, strikes, and cases of force majeure, 
are mutually excepted in the operation of this contract. 

XIV. It is mutually understood and agreed that this contract may be amended by 
mutual consent, and that at any time either party finds features of the joint business 
unsatisfactory or prejudicial to its interests, a conference shall be called to discuss and 
mutually agree upon necessary remedies. 

XV. Nothing in this agreement shall be permitted to confiict with the provisions of 
the Interstate Commerce Act, or any other law now in force, or hereafter to he enacted 
by the Government of the United States. It is, therefore, agreed and understood that 
this agreement shall, at all times, be subservient to the requirements of such law, or 
laws, and shall be modified arbitrarily to conform therewith, should it become necessary 

to do so. 

XVI. It is mutually agreed that this contract shall bind and inure to the benefit of 
the successors and assigns of the respective parties, but no assignment or transfer thereof 
shall operate to release or discharge either of them from any of the obligations or cove¬ 
nants by them hereunder entered into without the express written consent thereto by 

the other parties. 

IN WITNESS WHEREOF, the parties hereto have caused their respective corporate 
names to be hereunto signed in triplicate, by one of their respective executive oflicers, and 


270 AGREEMENTS BETWEEN RAILROADS AND STEAMSHIP LINES. 


their respective corporate seals to be hereto aflSxed and duly attested by their respective 
Secretaries, or Assistant Secretaries, on the 13th day of May, 1912. 

[SEAL.] 

Attest: 

A. H. BROMELL. 

[seal.] 

Attest: 

G. A. COOKE, 

Asst. Secretary. 

[seal.] 

Attest: 

GEO. R. ANDERSON, 

Assf. Secretary. 

S. R. P. 


The Mobile and Ohio Railroad Company and Southern Railway Company and the 
Munson Steamship Line do, by the execution of this instrument, agree and consent to 
amend the contract entered into between the Mobile and Ohio Railroad Company and 
Southern Railway Company and the Munson Steamship Line, dated May 13th, 1912, as 
follows ; the same to remain otherwise in full force and effect according to its terms, viz : 

That paragraph two of said contract which now reads : 

“ The Mobile and Ohio agrees to work exclusively with the Steamship Line in all mat¬ 
ters of water transportation in territories outlined in Article I hereof. 

“ The Southern Railway agrees to work exclusively with the Steamship Line on all mat¬ 
ters of water transportation in territories outlined in Article I, on business through the 
port of Mobile. 

“ The Steamship Line agrees to do all in its power to stimulate and increase the traffic 
over the lines of the railroad aforesaid and to put the route to be installed hereunder 
on a competitive basis with like traffic via other ports as to ocean rates ,in so far as it 
reasonably can. 

“ The Steamship Line agrees not to put on a steamship service to or from other Gulf 
ports to Buenos Ayres, or other South American ports, to which service may be operated 
under this agreement, without the written consent of the Railroad Companies aforesaid, 
except for the carriage of lumber and/or its products, or other freight which must be 
loaded at other ports in order to meet competition of other water carriers. This not to 
be construed as according any privilege to the Steamship Line to take cargo at other 
Gulf ports which reasonably can be loaded at Mobile or be shipped via Mobile. 

“ The Railroad Companies aforesaid agree to do all in their power to aid and expand the 
traffic from the territory served by them over the lines of the Steamship Line, as herein 
established.” 

Is hereby amended to read : 

That so far as it lawfully may, or unless compelled by legislative enactment, order of 
the Commission, or judicial decree to do otherwise, the Mobile and Ohio agrees to work 
preferentially with the Steamship Line in all matters of water transportation in terri¬ 
tories outlined in Article I hereof. 

That, so far as it lawfully may, or unless compelled by legislative enactment, order of 
the Commission, or judicial decree to do otherwise, the Southern Railway agrees, on all 
business through the port of Mobile, to work preferentially with the Steamship Line in all 
matters of water transportation in territories outlined in Article I hereof. 

The Steamship Line agrees to do all in its power to stimulate and increase the traffic 
over the lines of the railroads aforesaid through the port of Mobile and to put the route 


MUNSON STEAMSHIP LINE, 
By C. W. MUNSON, 


President. 


MOBILE & OHIO RAILROAD COMPANY, 

By R. V. TAYLOR, 

Vice Pres, and Oenl. Mgr. 


SOUTHERN RAILWAY COMPANY, 
By J. M. CULP, 


Vice President, 



AGREEMENTS BETWEEN RAILROADS AND STEAMSHIP LINES. 271 


to be Installed hereunder on a competitive basis with like traffic via other ports as to 
ocean rates, in so far as it reasonably can, and, in so far as it lawfully may, to work 
preferentially with the said lines of railroads through the said port of Mobile and as to 
traffic through said port. 

The Steamship Line agrees not to put on a steamship service to or from other Gulf 
ports to Buenos Ayres, or other South American ports, to which service may be operated 
under this agreement, without at least thirty-five (35) days’ written notice to the Rail¬ 
road Companies aforesaid, except for the carriage of lumber and/or its products, or 
other freight which must be loaded at other ports in order to meet competition of other 
water carriers. 

The Railroad Companies aforesaid agree to do all in their power to aid and expand the 
traffic from the territories served by them over the lines of the Steamship Line, as herein 
established.” 

It is further agreed that the concluding clause of paragraph seven of said contract, 
which said concluding clause now reads as follows: 

“ The Steamship Line shall not enter into any traffic contract with other rail lines at 
Mobile without the approval and consent of the Mobile and Ohio and the Southern 
Railway.” 

be and the same hereby is amended so as to read as follows: 

” The Steamship Line shall not enter into any traffic contract with other rail lines at 
Mobile without at least thirty-five (35) days’ written notice to the Mobile and Ohio Rail¬ 
road Company and to Southern Railway Company of the proposed contract and of its 
provisions.” 

IN WITNESS WHEREOF, the parties hereto have executed this amendment on this, 
the 15th day of October, 1912, 

[SEAL]. MUNSON STEAMSHIP LINE, 

By C. W. MUNSON, 

Attest: President. 


J. W. REYNOLDS, 

Assistant Secretary, 

[SEAL.] 

Attest: 


By 


MOBILE & OHIO RAILROAD CO., 

R. V. TAYLOR, 

Vice President. 


G. A. COOKE, 

Assistant Secretary. 

[SEAL.] 

By 

Attest: 

GEO. R. ANDERSON, 

Assistant Secretary. 


SOUTHERN RAILWAY CO., 

J. M. CULP, 

Vice President, 


EXHIBIT IV.—AgTeements or Arrangements Between Transcontinental 

Railroads and Transpacific Carriers. 

1. Agreement of March 26, 1906, (to continue for a period of ten 
years) between the Toyo Risen Kaisha and the Western Pacific Raih 
way Co., and supplementary agreements. 

(Only the following portions of the agreement of March 26, 1906, are herewith 
reproduced, namely, the introduction; section 1, paragraph 1; section 2, para¬ 
graphs 2, 4, 5 and 8; and section 3, paragraphs 1, 3 and 7. The agreement con¬ 
tains numerous other provisions which have for their purposes the establish¬ 
ment of freight rates and passenger fares, the issuance of through bills of lad- 



272 AGKEEMENTS BETWEEN KAILROADS AND STEAMSHIP LINES. 


ing, the payment of loss and damage claims, the establishment of general agen¬ 
cies, the division of rates, and the maintenance of a certain eflSciency in service. 
These latter provisions it was not deemed necessary to publish.) 

INTRODUCTION : Whereas it is the desire of each of the parties hereto that an ar¬ 
rangement shall be made, so far as such arrangement lawfully may be made, whereby 
each of said parties shall exchange traffic at said Port of San Francisco, each dealing 
so far as shall be lawful, exclusively with the other, and that the line of steamships of 
said Steamship Company and the line of railway of said Railway Company, and through 
it the lines of railway of said Gould System, shall form and be operated as a through 
transportation line, 

SECTION I, PARAGRAPH 1. The parties hereto mutually agree: 

That the line of steamships of the Steamship Company, and the line of railway of this 
Railway Company (and through it the lines of railway of the entire Gould System) 
shall, so far as may be reasonably practicable, be operated as if a single through trans¬ 
portation route extending from the Oriental ports, reached as aforesaid by the steam¬ 
ship line of the party of the first part, to all so-called “ common points ” in the United 
States of America and Dominion of Canada reached by said lines of railway or their 
connections, which said through transportation route is hereinafter referred to as the 
“ through line.” 

SECTION II, PARAGRAPH 2. That the Steamship Company will give and turn over 
to the Railway Company all eastbound traffic carried to the North American Continent 
by its steamships and all such traffic controlled by it originating in the Orient and des¬ 
tined to any point or points that can be reached by or via the line of the Railway Com¬ 
pany, or of any of its allied railways of the Gould System or any of the connections of 
any of said lines of railway ; provided, however, that nothing herein contained shall be 
construed to prohibit the Steamship Company from exchanging traffic with water trans¬ 
portation lines, although not operated or controlled by the Railway Company, operating 
from San Francisco, California, if such traffic, (whether inbound or outbound) shall have 
originated or shall have its final destination at (1) Victoria, British Columbia, Dominion 
of Canada, (2) the City of Tacoma, (3) the City of Seattle, both in the State of Wash¬ 
ington, United States of America, (4) the City of Portland in the State of Oregon, 
United States of America, (5) the City of San Diego and (6) the City of Los Angeles, 
both in the said State of California ; and the Steamship Company agrees that so far as 
practicable its line of steamships and the line of railway of'the Railway Company shall 
be operated as if a joint through line for the transportation of traffic. The Steamship 
Company will receive and promptly transport to its destination or deliver to the connect¬ 
ing carrier the same all westbound traffic tendered to it by the Railway Company. 

SECTION II, PARAGRAPH 4, The Steamship Company will land all its ships calling 
at the Port of San Francisco and will load and discharge all of the passengers and 
cargoes thereof at the wharf of the Railway Company, to be supplied as hereinafter pro¬ 
vided, and the Steamship Company will furnish all material, supplies, labor and services 
of every kind necessary for or connected with the landing and sailing of its ships, the 
discharging and loading of its passengers and cargo, the debarkation and embarkation 
of its passengers and their effects, or in any other manner occasioned by the calling of 
its ships or the carrying on of its business at the Port of San Francisco. The Steam¬ 
ship Company agrees to accept delivery on the Wharf of the Railway Company of all 
cargo unloaded from cars of the Railway Company. 

SECTION II, PARAGRAPH 5. That all freight of whatsoever description delivered 
by the Steamship Company to the Railway Company for transportation and delivery to 
any destination in the United States or the Dominion of Canada, or in Europe, will be 
delivered at such wharf of the Railway Company at San Francisco free from any instruc¬ 
tions as to the route by which the same shall be forwarded, it being expressly agreed 
that the designation of the route beyond the terminus of the Railway Company shall be 
left wholly to the determination of the Railway Company. 


AGKEEMENTS BETWEEN EAILROADS AND STEAMSHIP LINES. 273 


SECTION II, PARAGRAPH 8. The Steamship Company will cause all or any ot 
the agents of the Steamship Company In Japan, China and other Oriental countries to 
act as the agents of the Railway Company as well as of the Steamship Company when¬ 
ever and as the Railway Company shall so desire and will cause all of its said agents 
to act at all times and in all matters for the common advantage of the Steamship 
Company and the Railway Company. 

SECTION III, PARAGRAPH 1. That so far as the same lawfully may be done, the 
Railway Company will give and turn over to the Steamship Company all such west¬ 
bound traflSc of every description controlled by it as shall be destined to any Oriental 
or Hawaiian point or points upon or that can be reached with reasonable convenience 
by or via the line of the Steamship Company or any regular connection thereof and 
will cause all such westbound traffic of every description within the control of the 
Railway Company, originating in territory in any way tributary to and which with 
reasonable convenience can be forwarded over the line of the Railway Company to be 
delivered to the Steamship Company for transportation at the wharf of the Railway 
Company in San Francisco ; and that so far as practicable its line of railway shall be 
operated with the Steamship Company’s line as if a joint through transportation route 
for all transportation purposes. The Railway Company will receive and promptly trans¬ 
port to its destination over its line or deliver to connecting carriers all eastbound 
freight tendered to it on its wharf in San Francisco by the Steamship Company. 

SECTION III, PARAGRAPH 3. That all freight of whatsoever description delivered 
by the Railway Company to the Steamship Company for transportation and delivery 
to any destination in the Orient or the Hawaiian Islands will be delivered on the wharf 
of the Railway Company at San Francisco and, so far as lawfully may be, free from 
any instructions as to the route by which the same shall be forwarded beyond the line of 
the Steamship Company, it being expressly agreed that the designation of the route shall 
be left, as fully as it lawfully may be, to the determination of the Steamship Company. 

SECTION III, PARAGRAPH 7. The Railway Company will cause all of the agents 
of the Railway Company in the United States and in the Dominion of Canada and will, 
as far as practicable, cause all of the agents of any of the lines constituting the Gould 
System, likewise to act as agents of the Steamship Company, whenever the Steamship 
Company shall require any thereof so to act and will cause all its said agents and, so 
far as practicable, all the agents of said Gould System to act at all times and in all 
matters for the common advantage of the Steamship Company and the Railway Company. 

(According to a letter from the Toyo Kisen Kaisha, addressed to the Com¬ 
mittee, the preferential treatment indicated in the above-mentioned portions of 
the agreement of March 26, 1906, “ is not carried out, as the Western Pacific 
Railway Co. now supplies cargo equally to outgoing steamers of the Pacific 
Mail Steamship Co. and the Toyo Kisen Kaisha, and the latter company fur¬ 
nishes eastbound freight to the Southern Pacific Railway Co. and the Atchison, 
Topeka and Santa Fe Railway Co. equally with the Western Pacific Railway 

Co.”) _ 

(The aforementioned relationship between the Toyo Kisen Kaisha and the 
Pacific Mail Steamship Co. was arranged in a supplementary agreement by letter, 
dated August 21, 1911, the same being herewith reproduced.) 

San Francisco, August 21, 1911. 

Western Pacific Railway Company, 

Mills Building, San Francisco, Calif. 

Dear Sirs, _With a view to reestablishing, if possible, the port of San Francisco as 

the gateway for Oriental traffic, this Company proposes the following tentative arrange¬ 
ment, which, if assented to by you will constitute a temporary modification of the con¬ 
tract of March 26th, 1906, existing between our Companies. 


25655 “— VOL 4—14 - 18 




274 AGEEEMENTS BETWEEN KAILROADS AND STEAMSHIP LINES. 


1. The Toyo Kisen Kalsha is to he at liberty to join in establishing and maintaining 
during the life of the arrangement, joint forwarding agencies to represent that Company 
and the Pacific Mail Steamship Company, in Chicago, New York and other traffic centers 
in the United States, which will act jointly for the two Companies named in collecting 
and forwarding through shipments destined to the Orient. 

2. All shipments forwarded by such joint agencies during the period covered by this 
arrangement wili be forwarded to San Francisco via Western Pacific to go forward from 
San Francisco by whichever of the two Steamship Companies above named shall have 
the first sailing after the arrival of shipment at San Francisco, and this arrangement 
shall continue during said entire period notwithstanding the fact that the Southern 
Pacific or the Atchison, Topeka & Santa Fe or any company allied with either of said 
Companies may have in force proportional rates at any time during said period. 

3. The Western Pacific Railway Company shall impartially afford to said steamship 
Companies in all respects the same service, facilities and advantages, and upon arrival 
of any shipment at San Francisco the cars shall be switched to the wharf of whichever 
Company shall have the first sailing thereafter. 

4. The temporary arrangement now in effect under which cotton arriving over the 
lines of Western Pacific, Southern Pacific or Sante Fe is forwarded by the first sailing 
after arrival, is to he continued during the period of the arrangement provided hereby, 
with the further understanding that out-hound freight consigned to the Orient from 
points east of San Francisco over any line may be sent forward by the Steamship Com¬ 
pany having the first sailing irrespective of whether such freight shall have been for¬ 
warded by a joint agency of said Steamship Companies. It is understood, however, that 
this stipulation is not intended to and shall not relieve Toyo Kisen Kaisha from its obli¬ 
gations to employ all of its own agencies and facilities exclusively for the benefit of the 
Western Pacific-Toyo Kisen Kaisha Route. 

5. The foregoing arrangement will also involve the operation of steamships of Toyo 
Kisen Kaisha and Pacific Mail Steamship Company in cooperation under a joint schedule 
which will be made up as far as possible in such manner as to secure substantially uni¬ 
form Intervals, six or seven steamships to be operated by the Pacific Mail Steamship 
Company and four steamships by the Toyo Kisen Kaisha. The schedule may provide 
for five direct calls at Manila by Toyo Kisen Kaisha steamships, and the same arrange¬ 
ment now in force as to exchange and interchange, and lay-over privileges on all first 
class tickets will be continued during the period covered hereby. 

6. The arrangement hereby proposed will become operative immediately, or, as soon 
as proper arrangements therefor can be perfected, and shall continue until and includ¬ 
ing December 31, 1912, but neither the same nor any part thereof shall be continued 
beyond that date without the express assent of Western Pacific Railway Company, and 
none of the provisions of said existing contract between Western Pacific Railway Com¬ 
pany and Toyo Kisen Kaisha shall be deemed as against Western Pacific Railway Com¬ 
pany to be waived, abrogated or modified hereby, except as herein expressly stated. 

7. The arrangement hereby proposed shall be assented in writing by the Pacific Mail 
Steamship Company and the original or duplicate original of such writing delivered to 
Western Pacific Railway Company. 

Upon the acceptance hereof by your Company and the delivery of the written assent 
hereby provided for by the Pacific Mail Steamship Company, the provisions contained 
herein will constitute a contract between the parties thereto and to the extent of its 
terms a modification of the existing contract between the Western Pacific Railway Com¬ 
pany and the Toyo Kisen Kaisha for the period expressly covered hereby. 

Very truly yours, 


TOYO KISEN KAISHA 
By W. H. Aveby, 


Assistant General Manager.’* 

(The modification of the contract of March 26, 1906, as outlined in the fore¬ 
going letter, was accepted by the Western Pacific Railway Co.) 


AGREEMENTS BETWEEN RAILROADS AND STEAMSHIP LINES. 275 


2, The Atchison^ Topeha cSi Santa Fe Railway Go^s reply to the 
Committee^s Schedule of Inquiries, 

The division of traffic, or a territorial division of routes: 

This company has no arrangement with any steamship line for a territorial 
division of routes. The only definite understanding for a division of traffic is as follows: 

We have with the Pacific Mail Steamship Co. a mutual understanding for interchange 
of traffic in which the steamship line is to deliver this company 25 per cent of the 
inbound freight traffic from the Orient into San Francisco destined to eastern common 
points of the United States, and vice versa, that steamship line agrees to reserve 25 
per cent of their space, allotted to overland freight, for Orient traffic delivered them by 
this company. 

The provision for an exclusive working arrangement between the railroad and the ship 
line in matters of water transportation: 

This company has no exclusive working arrangements with any water trans¬ 
portation line. 

Mutual assistance in obtaining traffic: 

(a) The Pacific Mail Steamship Co., Occidental and Oriental Steamship Co., 
Toyo Risen Kaisha Steamship Co., Southern Pacific R. R., Union Pacific R. R., Chicago 
& Northwestern Ry., and Atchison, Topeka & Santa Fe Ry. jointly maintain passenger 
agencies at Yokohama and Hong Kong for the purpose of soliciting passenger traffic 
through the Port of San Francisco as against the Suez route and the Canadian Pacific 
via Vancouver. The expenses of these agencies are divided between the several parties 
to the arrangement, viz., the Pacific Ocean carriers pay 53 per cent and the American 
rail lines 47 per cent. This latter is in turn divided between the four lines mentioned. 

(h) The Southern Pacific, Union Pacific and Chicago & Northwestern Rail¬ 
roads, the Western Pacific, Denver & Rio Grande and Missouri Pacific Railroads, and 
the Atchison, Topeka & Santa Fe Ry. jointly contribute $25,000 per annum toward the 
soliciting, advertising and maintenance expenses of passenger agencies created by the 
Oceanic Steamship Co. in Australia to secure passenger traffic through the port of San 
Francisco in competition with the Suez route and the Canadian Pacific via Vancouver. 
This joint arrangement is made as a matter of economy, as otherwise each of the rail 
lines interested would be compelled to maintain separate agencies at considerable expense, 
which the volume of traffic does not justify. 

(c) The Atchison, Topeka & Santa B^e Ry., like numerous other American 
rail lines, pays or participates- in a commission of 10 per cent with maximum of $4.00 
for ocean to ocean, to Atlantic Ocean carriers on immigrant business delivered them or 
their connection through the ports of Boston, New York, Philadelphia, Baltimore and 
Galveston. This nominal commission is considered as a contribution toward the expense 
of soliciting this class of traffic. 

Meeting the competition of other lines: 

There are no cases where this company joins with steamship or water 
transportation lines in meeting the competition of other lines, although there are 
numerous cases where joint rates in connection with ship lines are the same as joint 
fares with rail lines. 

The time and number of sailings between designated ports: 

All steamship lines with which this company Interchanges traffic fix the time 
and number of sailings to suit their convenience and this is not a matter of negotiation 
with this company. 

3. The Southern Pacific Cols replies to the Gommittee^s Schedule 
of Inquiries, 

The Company answered all of the Committee’s inquiries in the negative with the 
explanatory remark that “The Southern Pacific Company, Pacific System, exchanges 



276 AGKEEMENTS BETWEEN RAILROADS AND STEAMSHIP LINES. 


with water carriers indiscriminately and on the basis of local rates of the parties, except 
that the United States Government shipments via San Francisco to Manila and Cavite, 
P. I., are pro rated 60 per cent rail and 40 per cent water.” 


Jf.. Agreement entered into on Decemher 7 ^, 1902^ and to remain in 
force until six months notice from either party to terminate is given^ 
by Messrs. Alfred Holt Co.., Managers of the Ocean Steamship 
Go. and the China Mutual Steamship Go.., and the Northern Pacific 
Railway Go. and the Greal Northern Railway Go. 

(In its replies to the Committee’s Schedule of Inquiries, the Northern Pacific 
Railway Co. states that this is the only formal contract now in force between 
it and a trans-Pacific service.) 

MEMORANDUM OF AGREEMENT, Made and entered into this 12th Day of Decem¬ 
ber, 1902, at Saint Paul, Ramsey County, Minnesota, by and between Messrs. Alfred 
Holt «& Co., of Liverpool, England, Managers of the Ocean Steamship Company, Limited, 
and of the China Mutual Steamship Company, Limited; and the Northern Pacific Rail¬ 
way Company and Great Northern Railway Company, both of Saint Paul, Minnesota. 

1. Messrs. Alfred Holt & Company’s object in sending their steamers across the Pacific 
is primarily for the purpose of developing traflSc between Europe and the Pacific Coast, 
so that cargo to and from Europe will always he their first consideration. 

2. Messrs. Alfre(^ Holt & Co. bind themselves to charge nothing less than the Trans¬ 
pacific Conference rates from time to time in force or less than is charged by the 
steamers serving the Northern Pacific Railway and Great Northern Railway which may 
be loading alongside their boat. 

3. Nothing in the last paragraph shall preclude Messrs. Alfred Holt & Co. from making 
such rates as they see fit to and from ports west of Hong Kong and Manila at which 
their vessels may call, provided that the rates so made shall in no case be lower than the 
Conference rates for similar class of goods from Hong Kong. 

4. Messrs. Alfred Holt & Co. undertake to give regular four-weekly sailings from the 
Pacific Coast and to give these sailings six months in advance and so far as may be 
practicable to arrange them so that they do not clash with the other sailings of the 
railways. 

5. The steamers will call at the following ports on their voyage assuming there is a 
reasonable quantity of cargo for each of them : Yokohama, Kobe, Hong Kong. 

6. The steamers have leave to call at Honolulu and San Francisco. 

7. OVERLAND CARGO EASTBOUND : Messrs. Alfred Holt & Co. undertake to con¬ 
fine their bookings of cargo to overland points to cargo from ports west of Hong Kong 
and Manila. They shall not engage cargo to overland points from the Philippine Islands, 
Hong Kong, China or Japan. 

8. OVERLAND CARGO WESTBOUND: The railways agree to give to Messrs. Alfred 
Holt & Company’s steamers all the overland cargo they can obtain which the railways’ 
existing steamship lines are unable to carry and they agree that the number of vessels 
employed by their existing steamship lines shall not be increased, excepting as provided 
by clause 11 a, so long as Messrs. Alfred Holt & Company’s regular four-weekly steamers 
can accommodate all the cargo offering. 

Note : “ Existing steamers ” is understood to include the two vessels now building 
for the Great Northern Railway. 

9. SPACE FOR OVERLAND CARGO WESTBOUND: Messrs. Alfred Holt & Co. agree 
to hold at the disposal of the railway company space in each of their Transpacific steam¬ 
ers for 2,000 tons measurement (40 cu. ft.) of overland cargo; such space to remain at 
the disposal of the railway company until thirty days before the steamer’s schedule date 



AGREEMENTS BETWEEN RAILROADS AND STEAMSHIP IJNES. 277 


of sailing from Tacoma when the railway company shall declare how much of this space 
they will fill. 

10. PACIFIC COAST CARGO EASTWARD AND WESTWARD : Messrs. Alfred Holt & 
Co. shall he at liberty to carry to and from all ports. The railways agree to give the 
same facilities for forwarding between Tacoma and Portland, &c. as they give to their 
existing connecting Transpacific lines. 

11. UNITED STATES GOVERNMENT CARGO: Should Messrs. Alfred Holt & Co. 
desire to enter for the conveyance of the United States Government cargo between the 
Philippine Islands and the Pacific Coast, they undertake before doing so to confer with 
Messrs. Frank Waterhouse & Co., the agents in Seattle of the Boston Steamship Com¬ 
pany (one of the Northern Pacific Railway Company’s existing connections) and agree 
with him the minimum rates at which either shall tender. 

11a. Should the tender of the railways and / or Boston Steamship Company of the 
19th November, 1902, for the conveyance of Government passengers and cargo to and 
from Manila during the period to June 30th, 1903, be accepted, it is agreed with 
reference to Clause 8 hereof that the Boston Steamship Company may charter one or 
two steamers, such as the “ Ohio,” of large passenger capacity and small cargo capacity, 
for the express purpose of caring for the passenger portion of this contract. It is also 
agreed that Messrs. Holt & Co.’s steamers shall so far as space permits carry any portion 
of the cargo (explosives excluded) that the Boston Steamship Company’s steamers 
cannot accommodate, and at the rates contracted with the Government; but no steamer 
shall be obliged to go to Manila with less than 1,000 tons measurement for that port. 

12. DIVISIONS OF OVERLAND FREIGHT EASTBOUND AND WESTBOUND: After 
payment of all connecting lines for services beyond St. Paul, Duluth or Minnesota 
Transfer, or beyond Yokohama, Kobe, Moji, Nagasaki or Hong Kotog (or Singapore or 
Colombo, if Messrs. Holt & Co.’s steamers call there) the balance remaining shall be 
equally divided between the railway and steamship. 

13. Messrs. Alfred Holt & Co. undertake to make no alliance with any other trans¬ 
continental railway in the United States. 

14. WHARFAGE: The railway will make no charge for wharfage on cargo that is 
delivered to, or received from the railway by the steamer. Wharfage on cargo out of 
which the railway does not get a haul other than switching not to exceed twenty-five 
cents ($0.25) per ton as per freight list. 

15. The railway to deliver cargo to the steamer within reach of her tackles and to 
take delivery from ship’s tackles. 

16. The railways agree that in the event of their importing material from Europe by 
sea to the Pacific Coast, they will give Messrs. Alfred Holt & Co. every opportunity of 
tendering for its carriage and will give their steamers the preference over others at 
equal rates. 

17. The railways agree to Messrs. Dodwell & Co., Ltd., being the agents for Messrs. 
Alfred Holt & Co. on the Pacific Coast. 

18. This agreement to remain in force until the expiration of six months’ notice from 
either side of a desire to terminate it. 

Note : In all cases where the “ Boston Steamship Company ” is mentioned, it Is 
understood to include the “ Boston Tow Boat Company.” 

IN WITNESS WHEREOF, The parties hereto have hereunto set their hands and 
seals the day and year first hereinabove written: 

ALFRED HOLT & COMPANY. 

By C. S. Whealler 

NORTHERN PACIFIC RAILWAY COMPANY, 
By J. M. Hannaford, 

gd r. P. 

GREAT NORTHERN RAILWAY COMPANY, 
By J. W. Blabon, 

Fourth Vioe President. 


278 AGREEMENTS BETWEEN RAILROADS AND STEAMSHIP LINES. 


5 . Agreement made April 1908 {effective until March 7 , 1919)^ 
hetween the Osaka Shosen Kaisha and the constituent companies of 
the Chicago^ Milwaukee <& St. Paul Railway System. 

(Only the following portions of the agreement of April 8, 1908, are herewith 
reproduced, namely, the introduction, and sections 4, 5, 6, 7, 8, 14, 15, 16, 20 
and 28.) 

INTRODUCTION: Whereas, it is to the mutual advantage of the parties hereto that 
an alliance he formed which will permit the free and continuous movement of all traflic 
over the through line thus formed in competition with other through lines: 

SECTION 4. Each party hereto stipulates that it is not now, and shall not hereafter 
become interested, directly or indirectly, in any other steamship or railroad line hand¬ 
ling, via Puget Sound ports, or any other port of the United States or the Dominion of 
Canada on the Pacific Coast, any freight business in competition with the line hereby 
established. 

SECTION 5. Business originating at or destined to ports and places on the Pacific 
Coast shall be considered as the local trade, and the Osaka Company may enter into 
contract with other steamship or railroad company for connection therewith. It Is, 
however, agreed by the Osaka Company that whenever the St. Paul Companies establish, 
of itself or through its connections, a line to such ports or places on the Pacific Coast 
from the port of interchange, the shipments shall be delivered to the St. Paul Companies 
In preference, provided the published rates of freight of the St. Paul Companies’ line 
on such business are not higher and such business is handled as promptly and properly 
as by other lines. 

SECTION 6. It is further mutually agreed by the parties hereto that all freight ten¬ 
dered to the Osaka Company by the St. Paul Companies shall be given the preference 
over any other freight tendered to the Osaka Company by any other corporation or 
shipper, the St. Paul Companies advising the agent of the Osaka Company daily of 
amount of freight contracted for next sailing; and the St. Paul Companies likewise to 
give the preference to through freight tendered by the Osaka Company over any other 
freight tendered to the St. Paul Companies by any other corporation or shipper. The 
St. Paul Companies agree to forward such traffic promptly and with dispatch to desti¬ 
nation, or to their points of delivery to other carriers. 

Silk, Silk Goods, Treasures, Parcel and Mail matters to be sent forward without delay 
by the Overland Express as Expedited Service next to the ship’s arrival at the port of 
interchange. 

SECTION 7. It is further agreed that the Osaka Company may and will upon east- 
bound traffic, and the St. Paul Companies may and will upon westbound traffic, quote 
substantially the same through rates that are quoted upon the same or similar traffic 
by competing lines via any route, and, so far as may be practicable, issue through bills 
of lading—showing the rate, whenever possible, to final destination—in connection 
therewith, to the end that the line hereby established may secure its reasonable pro¬ 
portion of the total traffic moving via all lines. All contracts for through traffic, 
either eastbound or westbound, shall be made in gold or its equivalent. 

SECTION 8. The Osaka Company may become a member of the North Pacific Line 
Conference and shall furnish the St. Paul Companies with a record of the proceedings 
of such conference as promptly as possible. 

SECTION 14. In Japan and China, the Osaka Company shall represent the interests 
of the St. Paul Companies, and in the United States and the Dominion of Canada, the 
latter to represent the former’s, both free of commission, and both parties shall be 
vested with the privilege of issuing through bills of lading from the territory in which 
the traffic originates covering the route of the other. 


AGREEMENTS BETWEEN RAILROADS AND STEAMSHIP LINES. 279 


SECTION 15. The Osaka Company further agrees that an agency shall be established 
at Its sole expense at the port of interchange to perform the usual and customary duties 
of such agency in connection with through traffic, and to look after the local trade for 
the Osaka Company ; and the St. Paul Companies shali, at the request of the Osaka 
Company, render such assistance as they can in locating and co-operating with said 
agency. 

SECTION 16. It is mutually agreed that the St. Paul Companies may establish a 
traffic agency or agencies to represent them in China and Japan, or both, and the Osaka 
Company may likewise establish any agency or agencies, in the United States, the agents 
of either party to work in connection with the joint line hereby established. 

SECTION 20. It is agreed that if the St. Paul Companies have on hand at the port 
of delivery to the Osaka Company, more tonnage than can be taken by the steamship 
first departing, and the^ steamship next following is not due to sail within four weeks 
owing to causes other than those beyond control of the Osaka Company, or hostilities, 
or official survey, the Osaka Company shall forward such excess to destination by its 
chartered steamships, or any steamer of any other line which will depart from the port 
of Interchange prior to the Osaka Company’s steamship next following; and the Osaka 
Company shall receive its proportion of divisions as provided herein for such excess. 

It is further agreed that if the St. Paul Companies’ service Is interrupted owing to 
reasons other than those beyond control of the St. Paul Companies; the St. Paul Com¬ 
panies shall forward to destination the through freight awaiting transportation at the 
port of interchange or arriving thereafter, by other lines, until traffic of the St. Paul 
Companies’ lines is restored to normal state; and the St. Paul Companies shall receive 
its proportion of divisions provided herein for freight so sent forward by other lines. 

SECTION 28. It is recognized by the parties hereto that the Interstate Commerce Law 
of the United States prevents the quotation of through rates on import and export 
freight lower than the current tariff rates between the point of origin, or the point of 
destination and the port of interchange; and it is therefore agreed that neither party 
hereto shall do, or permit its agents to do, anything in violation of said law. 


6. Agreement between the Nippon Yusen Kaisha {^designated as 
“ Corporation’^'^) and the Great Northern Railway Company and the 
Great Northern Express Company {designated as Companies 
effective November 7 , 1911^ and to continue in force ten years^ subject 
to cancellation by either party on one yeaYs written notice. 

(Although the parties agreed to the establishment of a service between desig¬ 
nated ports, through routing arrangements, mutual assistance in obtaining 
traffic and the establishment of the time and number of sailings, no provisions 
are contained in this agreement which openly declare the existence of an ex¬ 
clusive working arrangement. Certain sections, however, clearly indicate a 
preferential treatment between the parties, namely, Article IV, Section 2; 
Article VI; and Article VII, Sections 2 and 3. Only these sections of the agree¬ 
ment are herewith reproduced.) 

ARTICLE IV, SECTION 2. The Companies shall have the right to designate and de¬ 
termine rail lines and express companies over which all through cargo and parcels shall 
be carried, except only on such American bound cargo as the Corporation finds it neces¬ 
sary to honor the instructions of shippers or consignees relative to through routing. 
The Corporation shall not, however, forward such through cargo or parcels via other 
rail lines under through bills of lading, except in case of extreme necessity or when in 
their judgment failure to so forward cargo and parcels will subject the Corporation to 
loss of future business or to claims for damage. 



280 AGREEMENTS BETWEEN RAILROADS AND STEAMSHIP LINES. 


ARTICLE VI. If steamers In addition to the steamers of the Corporation and of the 
Great Northern Steamship Company shall he required by the Companies for the trans¬ 
portation of through cargo, parcels and passengers carried via said ports, the Corpora¬ 
tion shall have the first right to furnish such additional steamers or accommodations. 
It is the intention of the Corporation to maintain an efficient fortnightly service between 
said Seattle and Yokohama, Kobe and Moji, Japan, and Shanghai and Hong Kong, China. 
Nothing hereinafter contained, shall be construed as making it obligatory upon the 
Corporation to cause steamers to leave Seattle and Japan oftener than once in each month. 
It is expressly understood that in case the Corporation shall fail to maintain approxi¬ 
mately a fortnightly service between Seattle and Yokohama, Kobe and Moji in Japan, 
and Shanghai and Hong Kong in China, and it shall be found necessary in order to 
avoid delay to shipments of through cargo and parcels so to do, the Companies may 
forward such shipments of through cargo and parcels via other Steamships Lines affording 
direct service between said ports during such time as the Corporation fails to maintain 
a fortnightly service. The Companies shall not, however, forward such through cargo 
or parcels via other steamship lines under through bills of lading, except in case of ex¬ 
treme necessity, or when, in their judgment, failure to so forward cargo and parcels 
because of inability to forward by steamers of the Corporation, will subject the Com¬ 
panies to loss of future business, or to claims for damage on account of delay. The 
Corporation shall give the Companies due notice of its intention not to make any fort¬ 
nightly sailing, and the Companies will likewise give the Corporation notice of their 
intention to forward cargo via other lines as above provided. 

ARTICLE VII, SECTION 2. The Companies hereby agree to act as Agents in the 
United States and Canada for the Corporation, except at Seattle, Washington, where the 
Corporation will provide its own Agent and necessary clerical help and office, at its 

own expense; provided, however, the Corporation hereby reserves the right to appoint and 

* 

maintain at its own sole cost and expense its own agent at any point in the United 
States and Canada for the purpose of soliciting and securing such freight and passenger 
traffic as the Great Northern Railway Company does not, on account of the rate situation 
or for other reasons, desire to solicit, secure and handle. 

The Corporation shall act as agent for the Companies in China, Japan and in the 
East generally, performing such reasonable duties as are from time to time authorized 
by the Companies. 

ARTICLE VII, SECTION 3. The Companies shall also provide at the ports of Tacoma, 
Everett, Port Townsend, Portland, San Francisco, Victoria and Vancouver, agencies for 
the purpose of soliciting and engaging cargo, parcel and passenger traffic in the interests 
of the Corporation, reporting to the Agent of the Corporation at Seattle, Washington, 
on such matters, and the Corporation shall pay to the Companies a commission of two 
and one-half per cent of the revenue derived by the Corporation on outward local cargo, 
parcels and passengers secured for the Corporation, through the medium of such agencies. 


CHAPTER X, 
SUMMARY. 


METHODS OF CONTROL IN CONNECTION WITH SHIPPING CON¬ 
FERENCES AND AGREEMENTS—ADVANTAGES AND DISAD¬ 
VANTAGES OF SUCH CONFERENCES AND AGREEMENTS— 
RECOMMENDATIONS FOR PROPOSED LEGISLATION. 


Methods of Control exercised in connection with Steamship Confer¬ 
ences and Agreements in the American Foreign Trade. 

The foregoing chapters contain a description of 80 steamship agree¬ 
ments and conference arrangements, which, when considered collec¬ 
tively, show that as regards nearly every foreign trade route practi¬ 
cally all the established lines operating to and from American ports 
work in harmonious cooperation, either through written or oral 
agreements, conference arrangements, or gentlemen’s understandings. 
The few instances where -two or more lines serve the same route 
and have denied the existence of written or oral agreements 
for the regulation of the trade, are exceptions and not the rule. 

An examination of the numerous aforementioned agreements and 
conference arrangements shows that they differ greatly in their details, 
especially since most of them are adapted to meet the needs of the 
particular trades to which they apply, or the special requirements of 
the several lines which are parties to the arrangements. Aside from 
these differences of detail, however, all the agreements and arrange¬ 
ments show one unmistakable purpose, viz, the control of (1) compe¬ 
tition between the lines which are parties to the agreement or con¬ 
ference, and (2) competition from lines which are outside of the con¬ 
ference. The methods (as revealed by the aforementioned agree¬ 
ments) which effect control of what would otherwise be unrestrained 
competition are many and may be briefly summarized and illustrated 
as follows: 


281 




282 SUMMARY OF CONFERENCES AND AGREEMENTS. 

I. The regulation of competition between the lines, parties to the 
agreement or conference, with a view to maintaining rates and secur¬ 
ing to each line a certain portion of the traffic. These purposes are 
accomplished to-day by any one of the following methods: 

1. Effecting an agreement or understanding with reference 
to the rates charged. —In this regard the hnes may enter into: 

{a) Fixed rate agreements. —This method may be 
illustrated by the N. D. L. V. Freight Agreement,^ the Baltic Pool 
Agreements,^ the Mediterranean Freight Agreement of December 
15, 1911,^ and the agreements or understanding governing the 
lines operating from New York to Austraha; ^ New York to South, 
East and West Africa; ® New York to Asia via Suez and return; ® New 
York to most South American ports and return; ^ and Asia to Amer¬ 
ican Pacific Coast ports.® Generally speaking the rates are definitely 
prescribed in the agreement or in the tariffs agreed upon, and all 
changes in such rates must be made by mutual consent. Where a 
pooling arrangement exists, it is sometimes the understanding that 
while the companies agree not to accept freight at less than certam 
prescribed rates, each line is permitted on each sailing of a steamer 
to accept heavy freight, not exceeding a certain designated total, at 
less than the prescribed rate, but in case this is done the line must 
account for the same in the pool at the actual freight rate received for 
that quantity. 

(Jb) Minimum rate agreements.- —This method of 
regulating competition is used most extensively in the North Atlantic 
European passenger and freight business. Thus in the first and 
second class passenger business the primary purpose of the agree¬ 
ments, as explained in Chapter I, is to establish minimum rates for 
each steamer of the several hnes, depending upon the type of vessel. 
The business, however, is not pooled, and each steamer may charge 
more than the agreed minimum, depending upon the facihties offered 
to passengers. In the North Atlantic steerage business, where a 
poohng system prevails, the lines are not permitted by the agree¬ 
ments to reduce rates below a certain minimum in order to obtain 
their stipulated share of the business, but instead the hnes which 
are obtaining passengers in excess of the allotted amount must 


1 Chapter I, p. 28. 

* Chapter II, pp. 72-74. 
> Chapter II, p. 79. 


< Chapter IV, p. 104. 
® Chapter III, p. 98. 

• Chapter V, p. 116. 


7 Chapter VI, pp. 153-188. 
• Chapter V, pp. 130,131. 




SUMMARY OF CONFERENCES AND AGREEMENTS. 283 

advance their rates so that traffic will be diverted to the lines which 
are not securing their proper share of the business. Similarly, in 
the eastbound and westbound freight traffic between American north 
Atlantic ports and the United Kingdom, and in the eastbound trade 
from New York to Mediterranean ports, the lines are governed by 
minimum rate agreements. The hnes meet in conference and notify 
each^ other of their minimum rates upon a large selected Hst of 
articles, the rates thus filed being subject to change only after an 
agreed period of notice, varpng from 30 to 60 days. In other 
words, the hnes agree not to take freight (certain bulk articles being 
excepted) below the agreed minimum rates, but any line can serve 
notice that at the end of the designated period it will change these 
rates. Usually these minimum rates are the actual rates, except 
when rates advance very rapidly and the lines are in a position to 
charge more than the minimum. 

(c) Differential rate agreements. —Thus in the 
trade between New York and Venezuelan ports the Koyal Dutch 
West India Mail Line adheres to the rates of the Red Line, 

but owing to its indirect and slower service has the right, by virtue 
of an understanding, to charge rates which are 5 or 10 per cent 
under those charged by the Red line (p. 176). Certain North 
Atlantic passenger agreements governing first and second class 
passenger traffic, as indicated in Chapter I, also allow certain steamers 
a special rate which will measure the different services. 

(d) In some instances one line will he sufficiently 
powerful to dopninate the other lines and, without effecting any defi¬ 
nite understanding, secure the desired conditions in rates. In fact, 
such domination was found to exist in nearly every instance where 
two or more lines serve a given route and no agreement was admitted. 
Only a few illustrations need here be given. The three lines operat¬ 
ing in the trade between New York and the west coast of South Amer¬ 
ica via the Straits of Magellan have apparently avoided anything 
that resembles an agreement or gentlemaffs understanding; yet the 
dominant carrier, according to the testimony, determines the tariff of 
rates, and the smaller lines adopt these rates in full, or follow them 
as closely as possible (p. 186). In the trade to most of the eastern 
ports of Central America the United Fruit Co. holds such a dominant 
position (its steamers being so much larger and its service so much 
more regular and frequent) that the few small competitors are 


284 


SUMMARY OF CONFERENCES AND AGREEMENTS. 


allowed to operate without opposition, and charge the same rates 
(pp. 191-194). Again no agreement seems to exist between the lines 
operating in the trade between the Pacific coast ports of the United 
States and the west coast of Central America and Mexico. The 
facts obtained by the Committee tend to show, however, that the 
Pacific Mail Steamship Co. is the dominant power in the trade and 
that the other lines adopt its rates and refrain from antagonizing 
its interests (pp. 196, 197). In all of these illustrations the dominant 
line is so powerful that for the small competitors to start a rate 
war would mean their speedy elimination. In this connection 
there are also a few instances where a nonconference line works in 
friendly cooperation with the conference lines as regards rates. The 
Norton Line, for example, is not a party to the agreement governing 
the New York-Kiver Plate trade; yet the conference lines keep the 
Norton Line posted as to the rates they are charging although that 
line is under no obligation to maintain the same. But as already 
explained (p. 174), ^^the Norton Line has maintained the rates of the 
other lines and the relations between it and the five conference 
lines are just as cordial as they were when the line formerly belonged 
to the conference.^^ 

2. A'p'portioning the traffic hy allotting the forts of sailing .— 
This method may be illustrated by the following examples: The 
N. D. L. V. agreement, which allots certain European ports to each of 
the four signatories thereto, and which stipulates that ‘‘vessels in 
the trade with the United States shall not call either outward or 
inward at any home or adjacent port from or to which the vessels 
of any of the four lines are already sailing^^ (p. 27); the agreement 
between the Hamburg-American Line and the North German Lloyd, 
whereby these lines reserve to each other, respectively, the ports of 
Hamburg and Bremen as regards sailings from all American ports 
north of Savannah (p. 71); the traffic arrangement between the 
Russian East Asiatic Line and the Holland-American Line with 
reference to Rotterdam, the first line expressing its intention to oper¬ 
ate to Russian ports only, but that, when obliged to call at Rotter¬ 
dam for extra cargo, it agrees to maintain the rates of the Holland- 
American Line (p. 69); the agreement of 1908 between the Royal 
Mail Steam Packet Co. and the Hamburg-American Line whereby 
the first company agrees not to extend its American service to Haitian 
ports and Santa Marta (p. 214); and the agreement between the 


SUMMARY OF CONFERENCES AND AGREEMENTS. 285 

Compania Maritima Cubana and the New York and Cuba Mail Line 
(recently terminated) for a territorial division of the destination 
ports in Cuba as regards the trade to and from New York 
(pp. 205, 206). 

3. Apportioning the traffic hy restricting the number of 
sailings on the part of each line .—A typical example of this method is 
afforded by the agreement governing the Unes which operate between 
New York and the Orient via Suez. Each of the lines is allotted a 
certain number of saiHngs, these being distributed as nearly as 
possible at regular intervals throughout the year, and the order of 
taking the berth is mutually arranged between the lines. Additional 
sailings can be admitted only by the consent of two-thirds of the 
signatories, based on their respective number of sailings (p. 113). 
Similarly, in the agreements governing the American-Brazihan trade 
the Lamport and Holt Line is allowed 24 saiUngs from New York, 
the Prince line 24, and the joint service of the two Hamburg- 
American lines 24; while from Brazil the Hamburg-American services 
are allotted 24 saiUngs to New York, the Prince Line 24 to New 
York and 12 to New Orleans, and the Lamport and Holt Line as 
many as may suit its convenience. The Hamburg-American hnes, 
furthermore, agree to withdraw their service to New Orleans, sailings 
to that port to be maintained only by the steamers of the Lamport 
and Holt and Prince Lines (p. 155). 

4. Limiting the volume of freight which certain lines may 
carry .—^Very few such arrangements exist in the American foreign 
trade. The White Star Line (the most prominent indirect carrier 
between New York and Australia), for example, has an oral under¬ 
standing with the three direct lines operating from New York to 
Australia whereby the measurement cargo carried by the Wliite 
Star Line from New York via Liverpool for Austraha shall not ex¬ 
ceed one-fourth of the aggregate measurement cargo taken by all 
four hnes. Otherwise the White Star Line is not a party to the 
poohng agreement into which the other three lines have entered, 
and is free to quote its own rates (pp. 105, 106). 

5. Pooling the freight money from all or a portion of the 
cargo, the same to be divided in certain agreed proportions among 
the lines which are parties to the agreement. The pool is generally 
managed by some designated official on such a basis that, after pro¬ 
vision is made for certain payments to meet the cost of runmng the 


286 SUMMABY OF CONFERENCES AND AGREEMENTS. 

steamers, the balance of freight money is divided among the lines 
in such a manner that each obtains in the apportionment the amount 
allotted to it by the terms of the agreement. In some cases (the 
steerage agreements^ and the Baltic pooP serving as illustrations), 
each line is allotted a stipulated percentage of the total traffic, and at 
stated intervals an adjustment is made whereby the line or lines 
which have overcarried their allotment must pay to the lines which 
are short of their proportion a certain stipulated compensation. 
In other cases (Mediterranean Freight Agreement of 1911 ^ and the 
Calcutta-Pacific Conference Agreement ^), the lines are divided into 
two groups, and each group of lines is allotted, say 50 per cent of the 
total freight of all the lines, as in the first case, or one-third for the 

Calcutta fines and two-thirds for the Pacific fines, as in the last 

« 

instance. Sometimes the entire freight earnings are pooled; whereas 
in other cases (New York-West African trade the several fines each 
receive say 25 per cent of the earnings and the balance is then equally 
divided between the signatories to the agreement. 

6. Agreements between conferences, or between a group of 
conference lines and a nonconference line, where several trade routes 
adjoin or intersect one another .—Such agreements are illustrated by 
the N. D. L. V. passenger agreements with the Compagnie Generale 
Transatlantique and the American Line, known as Agreement 

with the Compagnie Generale Transatlantique, known as agreement 
with the Canadian Pacific Bailway Co. known as agreement 
and with the Austro-Americana, known as agreement 
Similarly, as noted in Chapter I, the Mediterranean Conference 
Lines have effected agreements with the Austro-Americana, and the 
American, White Star and French Lines, relative to their Italian 
and Oriental steerage passenger traffic via their Channel services.® 

7. Requiring the lines to deposit a stipulated sum as a guar¬ 
anty of good faith and declaring such deposits forfeited on the part of 
any line, if it renders any assistance, directly or indirectly, to a non¬ 
conference line, or itself starts a new service which will interfere 
with the trade covered by the conference. New lines may not be 
admitted, as a rule, except by unanimous consent; and sometimes • 
the agreements also stipulate that the lines agree to abstain from 


mil. I. 

2Ch. II, pp. 71-75. 
»Ch. n, p. 79. 


<Ch. V, p. 143. 
•Ch. Ill, p. 92. 
•Ch. I, p. 28. 


^ Ch. I, p. 29. 
8Ch. I, p. 30. 

•p.38. 





SUMMARY OF CONFERENCES AND AGREEMENTS. 287 

attacking, or competing for, any trade in wliich any other of the 
signatories may at present be engaged.’’ 

II. Meeting the competition of lines outside of the conference .— 
lYliile the conference lines regulate competition between themselves 
through one or more of the above-mentioned methods, and agree not 
to aid or encourage a nonconference line, nearly all the agreements 
which do not contain a deferred rebate system make no direct refer¬ 
ence to the methods which should be adopted for meeting the com¬ 
petition of outside lines, this matter apparently being reserved 
entirely for conference action. In this respect the agreements fre¬ 
quently provide that the signatories must take joint action to defend 
their mutual interests in the event of competition from other lines. 
Three methods seem to have been adopted to accomplish this pur¬ 
pose, viz: 

1. Deferred relate systems, whereby shippers, who agree to 
employ exclusively the steamers of the conference lines in a given 
trade, are allowed a rebate of a certain percentage of their freight 
payments (usually 5 or 10 per cent), which rebate is computed for a 
designated period (usually every three, six, or twelve months), but 
which is not paid until after a certain number of months (usually six 
months) following the period for which it is computed, and only on 
the condition that during the entire time, including both the period 
for which the rebate was computed as well as the time of deferment, 
the shipper hs,s given his exclusive support to the conference lines. 
Since the time of payment of the rebate follows the period for which 
it is computed, the shipper, if he desires to obtain the rebate, is under 
constant obligations to the conference lines, and is prevented from 
patronizing any other service since that act would mean the for¬ 
feiture of all accumulated rebates. Judging from the facts produced 
in the foregoing pages, this method has proved by far the most 
effective device for the control of a trade, and is being used principally 
in the long-distance trades (such as, for example, the westbound 
trade from the Orient ‘ and most South American ports ‘^) where the 
regular lines feel that they can assure to shippers a regular and 
efficient service only on condition of exclusive support. The system 
has proved especially effective where American importers are also 
importers in Europe and the same conference lines serve both the 


* Chapter V, p. 118. 


* Chapter VI, pp. 153-188. 




288 


SUMMARY OF CONFERENCES AND AGREEMENTS. 


American and European trade, and where (as in the coffee trade from 
Brazil to Europe and the United States the deferred rebate agree- 
ment stipulates that the payment of the rebates is dependent upon the 
shippers’ exclusive use of the conference lines for all shipments destined 
to either the United States or Europe, thus making it impossible for 
an independent line to secure freight unless it stands in a position to 
protect the shipper in both his American and European shipments. 
Moreover, as has been repeatedly pointed out in this volume, shippers 
require, above all else, a regular service, and in this connection the 
testimony shows that by patronizing an outside line the shipper 
would not only forfeit his rebates but could be penalized by being 
denied accommodations for future shipments even at the full rates of 
freight. Such retah^^tion would leave the shipper unprotected since 
an independent line is not large enough to supply him with tonnage at 
all times. In other words, the conference lines, by rotating the 
sailings of their steamers, can give a regular and frequent service, 
whereas the independent line with its fewer steamers can only offer 
sailings at less frequent intervals. 

With the exception of the rebates to Bermuda, Martinque and 
Guadeloupe ^ (where, however, the rebates are not deferred, but 
depend upon the size of the shipper’s total shipments), the deferred 
rebate systems now in use are equally open to all shippers who agree 
to give exclusive patronage, and are granted without discrimination 
as regards the size of individual or total shipments. Moreover, nearly 
all the rebate systems apply only to the American import trade, only 
four instances having been found where such rebates are granted 
in the export traffic from American ports, viz in the New York- 
Bermuda, Martinique and Guadeloupe trade (which, as noted, are 
not strictly deferred),2 in the New York-Colombian trade,® in the 
New York-Kingston (Jamaica) trade,^ and in the trade from the 
United Kingdom to certain American Pacific coast ports.® With 
reference to the American export trade it seems that the fines are 
laboring under the assumption that deferred rebates are illegal; and in 
some cases where such rebates formerly existed they have been aban¬ 
doned, and where their adoption has been taken under consideration, a 
decision was reached not to establish the same. In the import trade 
on the contrary, the fines appear to go on the theory that this coun- 


* Chapter VI, pp. 157, 158. 
«Ch. Vni, p. 219-221. 


»Ch. VI, p. 178. 
«Ch. VIII, p. 215. 


‘ Ch. II, p. 89. 




SUMMARY OF CONFERENCES AND AGREEMENTS. 289 

try has no jurisdiction over the matter, and that such rebates may be 
freely granted if the arrangement is made abroad and if the rebates are 
paid at a foreign port. But in this connection it should be noted that 
the deferred rebate system, although applied only to the import 
traffic, is, nevertheless, a very effective device for the control of the 
trade, since to make the trade profitable an independent line must 
have cargo in both directions. 

2. The use of fighting ships^ or collective competition 
against a single competing line. —To what extent this practice pre¬ 
vails at present is difficult to ascertain, practically all of the steam¬ 
ship line representatives who testified before the Committee having 
denied the existence of the practice. But the facts obtained by the 
Committee show clearly that this method has been used in recent 
years. Thus, in the North Atlantic passenger traffic, the evidence 
presented in the suit against the Hamburg-American Line et al, 
shows that in about the year 1908 the conference lines authorized 
the appointment of a committee for the purpose of selecting fighting 
steamers to destroy the competition of nonconference lines. This 
committee, according to the evidence, would select suitable steamers 
from any of the conference lines to sail on the same days and between 
the same ports, the regular rates being reduced to a point sufficiently 
low to secure the traffic. As already stated in this volume (p. 46) 
^‘the evidence in the Government’s suit shows that such opposition 
sailings were repeatedly instituted against certain independent lines. 
* * * Any surplus of passengers which were booked for the 

fighting steamer, but which could not be carried by the same, would 
be transferred to other conference line steamers at the reduced rates. 
The expenses and loss from the lower rates, resulting to any line 
whose vessels had been selected, were distributed over the members 
of the conference. It was thus a case of aU the lines, united in 
conference, opposing every sailing of a single opposition line. By 
distributing the loss over the several members of the conference, each 
constituent line would suffer proportionately much less than the one 
line which was fighting the entire group, and which would inevitably 
soon exhaust its resources in the conflict with the combined power 
of the large lines with their superior speed and better third-class 
accommodations.” Again, in the freight traffic, it appears that six 
leading German lines established a '‘fighting corporation,” called the 
Syndikats-Rhederei, the shares of which were apportioned among 
25655 “— VOL 4—14 - 19 



I 


290 SUMMARY OF CONFERENCES AND AGREEMENTS. 

the various lines with reference to the tonnage of the companies. 
This fighting corporation was organized toward the close of 1905, 
and according to the report of Mr. Robert P. Skinner, American 
Consul General at Hamburg, “four comparatively small and inex¬ 
pensive steamers were purchased, and these, with such others as 
may be chartered from time to time, are hired out to the six owners 
of the company to meet dangerous competition and to drive it away. 
The fighting ships handle chiefly bulk goods, leaving merchandise 
which requires prompt transportation to the care of the parent com¬ 
pany, which maintains its nominal rates as far as possible, the stress 
of competition being borne by the fighting ships principally. In 
times of peace the fighting ships engage in regular trade on time 
charters. As this corporation is not one for profit primarily, the 
investment in reality, is a new sort of insurance.” (Vol. 3, pp. 53-54.) 
Mr. W. G. Sickel, Vice-Director in charge of the Hamburg-American 
Line, testified before the Committee that “it is a well-known fact that 
the Syndikats-Rhederi does exist,” and that he believed that its 
purpose is as stated above. (Vdl. 2, p. 826.) 

3. Contracts with shippers which may he classified as: 

(a) Joint contracts made hy the conference as a 
whole .—Such contracts are made for the account of aU the lines in the 
agreement, each carrying its proportion of the contract freight as 
tendered from time to time. The contracting lines agree to furnish 
steamers at regular intervals and the shipper agrees to confine all 
shipments to conference steamers, and to announce the quantity of 
cargo to be shipped in ample time to allow for the proper supply of 
tonnage. The rates on such contracts are less than those specified 
in the regular tariff, but the liues generally pursue a policy of giviug 
the small shipper the same contract rates as the large shippers, i. e. 
are willing at all times to contract with all shippers on the same terms. 

(b) Contracts made hy the individual memhers oj 
the conference, which are open to small and large shippers alike, 
irrespective of the size of the shipment. According to this type of 
contract (illustrated by the conference lines in the New York-River 
Plate trade 0 each liue makes its own contracts with shippers and 
assumes sole liability for the fulfillment of the same. The shipper 
agrees to give the steamship line his entire shipments to certain desig- 


1 Chap. VI, pp 172, 173. 





SUMMARY OF CONFERENCES AND AGREEMENTS. 291 

nated ports during a definite period, and the line obligates itself to 
provide tonnage at definitely prescribed rates for all shipments offered, 
provided reasonable notice of intention to ship is given. The con¬ 
tract expressly provides that the entire shipments of the shipper can 
only be sent by the steamers of the contracting liue, or ^‘by steamers 
designated by the contracting line,’' thus implying that while each 
line makes its own contracts with shippers, the line when obliged 
to designate some other line’s steamer as per the terms of the con¬ 
tract, would not go outside of the conference. If the line reduces 
its rates to any^ other shipper during the period of the agreement it 
is usually provided that the shipper with whom the contract was made 
should be given the benefit of aU such reductions during the period 
that the lower rates remain in force. While there is nothing in these 
contracts that implies liberty on the part of the merchant to ship 
by any other line than the one he is contracting with, as a matter of 
fact, the shipper, it was asserted by witnesses, is allowed to ship by 
any of the other conference lines working in harmony with the line 
which made the contract. In a number of cases conference lines 
make both joint and individual contracts with shippers. Thus, m 
the New York-Brazil trade freight contracts for a specific sailing, 
or for a period not exceeding three months, are made by each line 
for its own steamers and on its own responsibility; but all contracts 
which extend beyond three months, or which involve a very large 
volume of freight, are usually joint contracts, i. e. made by one line 
on behalf of aU the lines, each line assuming one-third liability and 
the shipper having agreed, as previously stated, to confine his entire 
shipments of merchandise to the conference lines.^ 

(c) Contracts with large shippers either for all 
their freight or for certain important articles forming the main 
basis in a given trade, at lower rates than those charged on simi¬ 
lar goods, if shipped in small quantities. —In the trade from New 
York to the West Coast of South America, via the Strait of Magel¬ 
lan, the lines carry much of the freight under informal contracts for 
firms which have large interests on the West Coast of South America. 
These firms are given a fixed rate per ton for a specified period on all 
their shipments in bulk, the rate applying to the entire consignment 
of merchandise without regard to the rates which would be charged 
on particular articles if offered separately for shipment, with the 


»Clu VI, p. 160. 





292 SUMMARY OF CONFERENCES AND AGREEMENTS, 

result that the average contract rate on articles included in the large 
bulk consignment might be lower than the rates applying to the same 
articles when sent by exporters who are unable to furnish large com¬ 
bination cargoes. The representative of one of these lines testified 
that the United States Steel Corporation, for example, was granted 
rates about 15 per cent below the rates granted to other shippers 
because of the very large tonnage offered (pp. 186, 187). Again, the 
trade between New York and Guadeloupe, Martinique, and Bermuda 
furnishes another illustration, the ultimate rate of freight in this trade 
being arranged on a sliding scale based upon the quantity shipped. 
Since the quantity can not be ascertained in advance, an adjustment 
is made at stated periods for the purpose of allowing the shipper a 
refund on the rates which he paid when the freight was offered, and 
the size of the refund depends upon the quantity shipped. The 
shipper agrees to send all of his freight by the contracting line, 
guaranteeing a minimum quantity, and the rebate represents the 
difference between the freight paid and the actual freight as computed 
on the basis of the quantity shipped. The rebate, however, is paid 
only on the condition that the shipper has faithfully carried out all 
the terms of the agreement pertaining to the minimum quantity of 
freight guaranteed, the shipment of all freight by the line, etc. (pp. 
219, 220). 

4 . Agreements with various American railroads relative to 
the steamship service from certain American ports. —Thirty-two 
such agreements were discussed in the Chapter on “Agreements 
between American Railroads and Foreign Steamship Lines,” ^ and 
in most instances these agreements provide for an “exclusive” or 
“preferential” working arrangement between the ocean line and the 
railroad which are parties to the contract, as regards the use of 
docks; the furnishing of freight by either party to the other, with 
the understanding that, so far as it is within their power to control 
the same, the parties will dehver to each other the freight which 
has been offered to them for through shipment; cooperation be¬ 
tween the parties in meeting competition from other carriers serv¬ 
ing the same port; the regulation of rates for purposes of competi¬ 
tion, via other ports; the prohibition of other traffic agreements in 
the trade by either party; and the general promise to mutually aid 
each other in the promotion and improvement of the export and 


»Ch. IX, pp. 239-280. 




SUMMARY OF CONFERENCES AND AGREEMENTS. 293 

import traffic through the port to which the agreement applies. 
These agreements, as stated in Chapter IX, when considered in 
conjunction with the agreements and conference arrangements exist¬ 
ing among the steamship lines themselves, enable the favored lines 
^Ho occupy a strongly entrenched position from a competitive 
point of view, as compared with independent water carriers which 
have no such steamship conference or railroad connections 
(p. 258). In a considerable number of instances the provisions of 
these agreements have been altered so as to constitute a prefer¬ 
ential’^ alliance, instead of an “exclusive” one, but as previously 
stated (p. 240), “a careful reading of the modified contracts, with 
their many provisions for a ^preferential’ alliance between the par¬ 
ties in the use of railroad terminals and the solicitation and ex¬ 
change of freight, causes one to wonder whether the change from 
a condition of ^exclusiveness’ to one of ^preference’ means much 
in actual practical results. * * * Judged from their wording 

most of the agreements have brought about a close preferential 
alliance between vast railway systems, controlling the traffic of 
large sections in the interior of the United States, and important 
conference steamship lines, which is bound to prove a powerful aid 
to the preferred water carrier as compared with any independent 
line mot thus allied.” 

Secrecy of Agreements and Prevalence of Oral Understandings. 

Reference should here be made (1) to the tendency toward oral 
imderstandings, instead of written agreements, between the lines 
operating to and from ports of the United States, and (2) the care 
which has been exercised to prevent agreements and understandings 
from becoming public. Oral understandings were described by vari¬ 
ous witnesses as “safer” than written agreements, and the pre¬ 
ceding chapters refer not only to many agreements which were of 
an oral nature from their inception but to several instances where 
written agreements were terminated and oral understandings sub¬ 
stituted, the witnesses however admitting that the lines continue 
to follow the same rates and conditions which were previously 
observed under the written agreements. In fact, witnesses repeat¬ 
edly drew the distinction between formal written agreements and 
oral or “tacit” understandings. 


294 SUMMARY OF CONFERENCES AND AGREEMENTS. 

While not involving as strong a moral obligation as written agree¬ 
ments, the evidence shows that for all practical purposes oral 
arrangements are quite as effective. Judging from the manner in 
which the lines observe the same, the existing oral understandings 
give unmistakable evidence of the high order of integrity prevailing 
in modern business, and justify fully the phrase ^^gentlemen’s 
agreements.” Written agreements seem to have accomplished 
their purpose in many trades and are apparently no longer needed. 
The lines in some instances need not even meet in conference; they 
may avoid every appearance and every act which would seem to 
show the existence of an agreement or understanding; and yet 
operate in the same spirit of harmony that would prevail if a writ¬ 
ten agreement existed. There is still friendly rivalry in procuring 
business, but this business is secured at not less than certain under¬ 
stood rates. Again, in nearly all of the few trades where agree¬ 
ments or understandings have been denied by all the interested lines, 
a remarkable uniformity in rates seems to exist and not a trace of a 
rate war can be found. The situation has been explained to the 
Committee as one of following the leader,” the dominant carrier 
fixing the rates and the less important lines adopting those rates, 
they being allowed to exist in the trade without having an effective 
fight waged against them, as long as they conform to the rates and 
conditions established by the dominant carrier. 

Where written agreements govern the rates and methods of the 
lines, the terms of the agreements have been guarded with the utmost 
secrecy. Whereas domestic lines, with few important exceptions, 
answered the Committee’s Schedule of Inquiries, the foreign lines, in 
the majority of instances, either ignored entirely the Committee’s 
request for information or, under one pretext or another, declined to 
answer. Of the 208 foreign lines to whom Schedules of Inquiries 
were directed only 88 replied, and in some instances where the 
Inquiries were answered the lines gave only the merest outline of the 
agreements or understandings to which they were parties. American 
diplomatic and consular officers, who were instructed to furnish copies 
or information of such agreements as far as the same could be ob¬ 
tained abroad, in most cases, when applying to steamship line rep¬ 
resentatives for the same, met with a polite refusal. A considerable 
number of the lines objected to the Committee giving publicity to 
their agreements, either on the ground that a suit was pending, or 


SUMMARY OF CONFERENCES AND AGREEMENTS, 295 

that other lines should not be made acquainted with their business 
methods. The testimony before the Committee also shows that in 
the majority of instances the agreements are only in the possession 
of the foreign principals of the lines, most American representatives 
of the lines having expressed a mere knowledge of their existence and 
an entire ignorance of their provisions. 

Advantages of Shipping Conferences and Agreements in the American 

Foreign Traded 

Practically all steamship representatives who testified before the 
Committee, as w^ell as a majority of the leading American exporting 
and importing firms who expressed their views on the subject to the 
Committee, contended that shipping agreements, conference relations, 
or oral understandings which steamship lines have effected among 
themselves in nearly every branch of our foreign trade are a natural 
evolution and are necessary if shippers are at all times to enjoy 
ample tonnage and efficient, frequent, and regular service at reason¬ 
able rates. Such agreements, it is contended, are a protection to 
both shipper and shipowner. To the shipper they insure desired 
stability of rates and the elimination of secret arrangements with 
competitors. To the sliipowner they tend to secure a dependable 
return on the investment, thus enabling the lines to provide new 
facilities for the development of the trade. Furthermore such 
agreements are held to furnish the 'means for taking care of the 
disabilities of the weaker lines, whereas unrestricted competition^ 
based on the survival of the fittest, tends to restrict the develop¬ 
ment of the lines and in the end must result in monopoly. Briefly 
outlined, the advantages secured through agreements and cooper¬ 
ative understandings, as presented to the Committee, are the fol¬ 
lowing: 

1, Improvement in service: 

1. Regularity of service, resulting in the following advantages: 

{a) Opportunities to merchants for shipping are 
increased, resulting in a much greater increase in the volume of trade, 

1 The reader is referred to the Summary of replies received by the Committee in answer to its circular 
letter of Feb. 18, 1913, relating to the advantages and disadvantages of steamship agreements and con¬ 
ferences,” published in Vol. 2, pp. 1397-1408 of the Committee’s proceedings. This summary represents 
the views of leading exporting and importing firms operating at our most important ports. Portions of 
this summary are reproduced in this chapter. The reader is also referred to the report submitted to the 
Committee on the Merchant Marine and Fisheries by the Committee appointed by the representatives 
of steamship lines maintaining established services from New York to foreign countries, including Porto 
Rico and the Philippines, undo- date of Mar. 3,1913. This Report is published in VoL 2, pp. 1357-1374. 




296 SUMMARY OF CONFERENCES AND AGREEMENTS. 

especially to new or remote markets, than would be the case if goods 
could be supplied only at irregular intervals. 

(b) Fixed dates of sailings at regular intervals en¬ 
able shippers to work with smaller stocks than they otherwise could, 
thus reducing unnecessary risks, as well as storage charges. 

(c) Makes unnecessary the engaging of cargo space 
considerably in advance, and shippers incur no penalty or other in¬ 
convenience if unable or unwilling to ship goods at the last moment. 

(d) Merchants are enabled to make forward con¬ 
tracts for the delivery of goods at a definite date. This factor is im¬ 
portant in connection with stability and uniformity of rates. In 
view of both factors merchants can make contracts for forward de¬ 
livery at a definite date and price, including cost, freight, and insur¬ 
ance. Such contracts are of vital importance in the trade of to-day, 
which is largely conducted in large quantities and on the basis of 
orders placed months ahead and calculated on a small margin of 
profit. 

(e) Without regularity of service in the long-dis¬ 
tance voyages, or in the new and undeveloped services, American 
merchants and manufacturers would be operating at a great disad¬ 
vantage ks compared with European merchants, who now have the 
benefit of a more highly developed service from European ports to 
foreign markets. 

(f) A better distribution of sailings is secured. 
Under unrestricted competition a number of vessels may sail from 
the same port within a day or week, resulting in no sailings from 
that port for a considerable period thereafter. Under a system of 
cooperation, however, both the time and ports of sailings are agreed 
upon, thus avoiding the waste involved in several ships calling at 
ports which require only one and giving an excess tonnage on one 
date and a corresponding lack of tonnage at other times.’' 

(g) A large portion of American exports coming 
from the interior, it follows that, with regular sailings, goods arriving 
late and missing one steamer may be dispatched by the next steamer 
of another line, thus causing only a short period of waiting, with the 
result that unnecessary port charges are avoided, the accumulation 
of goods is prevented, and the loading and delivery of cargo is facili¬ 
tated. 


SUMMARY OF CONFERENCES AND AGREEMENTS. 


297 


2. Greater security is given to capital invested in the 
steamship business and because of this greater security shipowners 
are enabled to supply an adequate number of vessels of a higher 
class and greater speed than the ordinary tramp. Moreover, con¬ 
ditions surrounding most trades are dissimilar as regard the depth 
of water at the ports, the nature of the cargo offered, and the quantity 
of freight moving during certain seasons. By giving vessel owners 
a dependable return on the investment they are enabled to provide 
new facilities for the development of the trade and to adequately 
adapt the sailings, speed, and equipment to the particular trade. 
To many merchants the adaptability of the service to the require¬ 
ments of the trade is highly essential, because of the nature of their 
exports and imports. The benefits claimed for this advantage are 
the following: 


(a) Cargo is delivered in better order and with 
greater dispatch and regularity. 

(&) Insurance premiums on cargo are reduced, and 
the rate of insurance may be counted upon as more uniform and 
stable, thus again favoring merchants in making contracts for the 
forward delivery of goods. 

(c) Loss of interest on the cargo while in transit is 


reduced. 


(d) Shippers are relieved of anxiety as to the class 
of vessel by which their freight will be shipped. 

11. Stability of rates over long periods of time: 

1. Removes the inconvenience which would exist if mer¬ 
chants and shippers were obliged to quote different propositions 
on nearly every consignment, thus eliminating what was formerly an 
undesirable speculative risk under the open competitive system. 
A uniform selling price in foreign markets is considered highly 
essential by merchants. Moreover, conference lines seek to give 
reasonable notice of alteration in rates, and when increasing then- 
rates shippers are allowed to declare outstanding contracts at the 
lower rate. 


2. Reduces the complaints from buyers abroad. American 
exporters assert that during periods of rate competition complaints 
from foreign buyers are numerous if sales to them do not happen to 
be on the lowest basis of cost and freight, while if there is uniformity 
in rates, even though these rates be on a higher level, it is seldom 
that foreign consignees make complaints. 



298 SUMMARY OF CONFERENCES AND AGREEMENTS* 

3. Enables shippers and merchants to calculate laid-down 
costs and sell goods for dehvery in the future. American exporters 
assert that such contracts for future delivery are to-day a necessity, 
and in this respect nothing is regarded so detrimental to the export 
trade as uncertainty regarding sailings and violent fluctuations in 
freight rates. Fixed rates under a system of cooperation, on the 
contrary, make possible the contracting for space for months, for 
a year, or even longer in advance, if desired. Such facilities are 
enjoyed by foreign exporters to competitive markets, and it is 
essential that American shippers should be placed on an equally 
favorable basis. Prominent exporting firms have again and again 
asserted to the Committee that they have experienced various rate 
wars during the past 10 to 15 years and are convinced that the 
present condition of fixed rates and regular sailing opportunities 
places all merchants upon the same basis as regards their estimates 
on contracts and produces much better results for the exporter and 
manufacturer than could be possible under the old order of things. 

4. During periods of rate cutting buyers abroad generally 
pursue a pohcy of buying from hand to mouth instead of placing 
large orders for shipments ahead, because they never know what the 
goods will cost them by the time the same are received. If they 
foresee serious fluctuations in rates during the one or more months 
which are required to dispose of large lots of merchandise, they 
prefer to buy small lots, even at a greater cost, in order to have a 
chance to meet their competitors. 

5. During periods of rate cutting steamship owners are 
reluctant to make forward contracts for the carriage of freight 
because of unwillingness to sell cargo space for the future at a loss. 

6. While competition in rates between conference lines 
ceases, competition in facilities continues. Although the conference 
system largely results in placing rates outside the influence of compe¬ 
tition, by pursuing a pohcy of charging “what the traffic will bear,’’ 
these rates must ultimately be reasonable for the foUowing reasons: 

(a) It is to the interest of the lines not to cliarge 
rates detrimental to the development of traffic. Shipowners depend 
for success on the good will of shippers, and to build up business 
must estabhsh rates which will enable their American chents to 
compete successfully with foreign merchants engaged In the 
trade. 


same 


SUMMARY OF CONFERENCES AND AGREEMENTS. 299 

(b) Shippers are not placed at the mercy of the 
conference lines, because in nearly all the important branches of the 
American foreign trade there is competition from regular lines 
serving European merchants to the same ports. The lines serv¬ 
ing American merchants must meet the rates of the regular lines 
trading to the same ports from foreign countries. In other words, 
world conditions govern ocean rates to and from the United States. 

(c) If the rates of the regular lines, to quote the 
New York committee, “should exceed or even approximate the char¬ 
tered rate for tramp steamers, large shippers immediately protect 
themselves by the employment of tramps for the transportation of 
their shipments. Small individual shippers who can not accumulate 
merchandise in quantities sufficient to justify the charter of tramp 
steamers are at such times served by charter brokers, who are always 
ready, when rates by the regular lines advance to such a point that a 
profit can be made by charter, to lay chartered ships on the berth, 
themselves accumulating the shipments of numbers of small mer¬ 
chants, who by this means can always protect themselves against 
oppression.’^ (Vol. 2, p. 1363.) 

Despite the great increase in ocean rates in recent years the great 
majority of leading exporting and importing houses which have 
expressed their views on the subject to the Committee consider the 
present rates charged by the steamship lines as fairly reasonable 
when comprared with charter rates prevailing the world over, and 
taking into consideration the capital invested, the increased cost of 
operation, the better character and greater speed of the vessels, the 
greater regularity of sailings, the maintenance of depreciation and 
sinking funds, the facilities of the ports of call, and the frequent 
absence of return cargo. While many of the firms express a desire 
for a lower level of rates than exists to-day, provided they are uni¬ 
form, they frankly admit that the present high rates, as long as they 
are steady over considerable periods of time and equally applicable 
to all without rebates or other special favors, do not militate against 
them nearly so much as would a lower level of rates if the same was a 
fluctuating one and was accompanied by irregularity in sailings. 
Moreover, the large increase in the number of steamers and in their 
size during the past 15 years in nearly all divisions of our foreign 
trade is pointed to as showing the desire of the lines to keep pace 


300 


SUMMARY OF CONFERENCES AND AGREEMENTS. 


with the growth of the country’s export trade. It was also the gen¬ 
eral assertion that the regular lines give shippers advantages as con¬ 
trasted with tramp steamers. Not only are their rates uniform and 
their sailings reasonably regular, but their steamers are faster and 
their service better, and in the main these advantages overbalance 
. the increase in rates. 

III. Uniform freight rates secured to all merchants. —^Uniform 
rates protect the small against the large shippers, and relieve all 
shippers from the effects of underhanded discrimination. Under 
open competition powerful shippers, or combinations of shippers, can 
obtain preferential rates, while under a system of cooperation it is 
not to the interest of the conference to give special terms to powerful 
chents. Rate wars are detrimental to the interests of small shippers 
because the object in every rate war is to obtain the freight of large 
shippers by offering special rates. The inevitable result of rate wars 
is a gradual monopohzation of the trade in given commodities by the 
more powerful shippers. 

Almost without exception, the testimony before the Committee of 
conference line representatives shows that it is the purpose of their 
lines to charge uniform rates and to extend equal opportunities to 
all shippers. Practically aU shippers, also, who in their statements 
to the Committee were favorable to agreements and conferences, 
took the view that to maintain equal treatment toward small and 
large shippers it is absolutely necessary that steamship lines should 
be allowed to cooperate, and that the improvement toward greater 
fairness between shippers is due to the fact that the lines have 
cooperated. Competition in the steamship business was regarded by 
them as the demoralization rather than the life of trade; as the means 
of introducing uncertainty instead of certainty, and inefficiency 
instead of efficiency; and that, inevitably, while all shippers are 
placed ultimately at a disadvantage through open competition, the 
small shipper fares much worse than his stronger competitor. 

IV. Prevent the elimination of weaJcer lines in the various trades .— 
Unrestricted competition, based on the survival of the fittest, tends 
to restrict the development of the lines and in the end results in 
monopoly. Just as rate wars result in the monopohzation of trade 
by the larger shippers, so also do they result in the monopohzation 
of the carrying trade by one or a few of the most powerful carriers. 




I 


SUMMARY. OF CONFERENCES AND AGREEMENTS. 301 

This is especially true in the long-voyage trade where poohng 
becomes desirable. Here equal rates can not be charged by all the 
hnes in a given trade unless all are equal in speed and equipment. 
High-class freight, paying the most remunerative rates, would go to 
the best ships, while the least remunerative cargo would be sliipped 
by the inferior boats. As reported by the New York Committee of 
steamship representatives:- “By means of poohng the weaker line is 
compensated for its failure to obtain a fair share of the more remu¬ 
nerative goods and by hving alongside the strong line adds to the 
total of the shipping facilities which the trade may reasonably 
require.” (Vol. 2, p. 1368.) 

In addition to the combinations by agreement there are numerous 
instances of consohdations among steamship lines by actual amal¬ 
gamation or through stock control of subsidiaries. (The most not¬ 
able examples of such consolidations are the International Mercantile 
Marine Co., the Royal Mail Steam Packet Co., the Hamburg-American 
Lines, and Furness, Withy & Co.). This movement toward actual 
consolidation by ownership, various witnesses have emphasized, 
would have taken place more rapidly and on a much larger scale if 
the making of steamship agreements and conferences had been 
impossible. In the absence of cooperation through written or oral 
agreements, according to these witnesses, only two alternatives 
present themselves, viz, consohdation by actual ownership or the 
ehmination df the weaker hnes through cut-throat competition. 

V. Maintenance of rates from the United States to foreign markets 
on a 'parity 'with those from other countries, thus enabling Ameri¬ 
can merchants to compete successfully with foreign merchants. 
It has been the contention of all the conference line representa¬ 
tives who have appeared before the Committee that their lines 
make every effort to keep American rates to foreign markets 
on a parity with European rates. The Committee has received 
only 27 complaints from exporting interests charging that American 
and European rates to the same destination are not kept on a 
parity, to the detriment of their business; and it should be noted 
that less than half of these complaints present any definite data 
tending to confirm the complainants charge. A majority of the 
complaints are general in character and merely call attention to 
the desirability of having some properly constituted authority 


j 


302 SUMMARY OF CONFERENCES AND AGREEMENTS. 

investigate this subject from time to time. In answer to these 
charges the New York Committee of steamship line representatives 
maintains that— 

while occasional differences arise, as a rule shippers are not charged higher rates 
from this country than shippers in Europe are called upon to pay on the same com¬ 
modity. In this respect the lines running from ports of the United States are at 
a decided disadvantage compared with the European services, because the classes 
of cargo offered from American ports are of lower grade than those received by the 
European lines. A ship sailing from Europe will obtain better freight earnings 
because it carries a larger percentage of high-class cargo, while the expenses incurred 
in United States ports are always considerably higher than those of a vessel loaded 
at European ports. Besides, many of the lines running from this country to 
foreign ports, imlike the European lines, obtain no return cargoes, and are obliged 
to return to our ports either directly in ballast, or via some other loading port. These 
facts tend to increase the running expenses of the American services and would 
therefore justify a somewhat higher freight rate from American ports. 

VI. Reduction in the cost of servicej eventually resulting in lower 
freight rates for a high standard of service. 

1. By eliminating wasteful competition among the lines, thus 
reducing the aggregate cost of service of aU the lines. 

2. By arranging the order of the sailings of the several lines 
at definite dates, and by regulating the sailings of the vessels of the 
various lines in such a manner as to prevent a number of vessels 
calling at ports which require only one at a given date. 

YU. Cost of service can he more economically distributed over the 
traffic so as to develop the trade. 

1. By reducing rates on articles where the rate would bear 
too heavily, and securing compensation on other items where the 
value and size justify the same. 

2. By enabling the lines to view the trade “not only as it is, 
but as it may become.^^ Certain ports may be placed on a reasonable 
footiug in freight rates, although the present movement of freight ' 
would warrant much higher rates. This is especially true where 
poohng is practiced. “In connection with the operation of a steam¬ 
ship conference,’’ as reported by the New York Committee, 

pooling is nothing more than an equalization of expenses and earnings by the com¬ 
ponent members of a conference with the object that the conference shall furnish all 
the facilities that are demanded for the transportation both of profitable and unprofit¬ 
able cargo and for the accommodation of the least profitable as well as the most 
profitable ports. Under its operations regularity of service is maintained, whether 
full cargoes are offered or not, whether the cargoes offered at any particular time be 



SUMMARY OF CONFERENCES AND AGREEMENTS. 


303 


of a more or a less profitable kind, and whether the going rates as embodied in the 
tariff be profitable as compared with the general market value of tonnage or not; it 
enables the conferees to give service within the area of the conference operations at 
small or unimportant ports, often at a loss, which would have to be neglected unless 
such loss could be equalized by being brought into a division of the earnings with the 
other vessels which serve the more important ports. The conferees, in substance and 
effect, become partners for the purpose of supplying tonnage for the particular trade in 
which the pool operates, and they divide their earnings and losses in proportion to the 
capital represented by tonnage which is furnished to supply the needs of the trade. 
(Vol. 2, pp. 1367-1368.) 

3. By increasing the number of sailings to the smaller ports. 
On most routes there are many ports of destination which should be 
served, and no one owner could serve all except at great expense, 
such as extra steaming and port charges, and by greatly prolonging 
the voyage to the dissatisfaction of consignees. The natural tend¬ 
ency where aU lines are competing would be for each owner, in 
order to compete in rates and speed, to avoid extra expenses and loss 
of time by not calling at the comparatively unimportant ports. 
Without pooling, it is asserted, the United States would have no 
direct communication to-day with many of the minor ports through¬ 
out the world whose aggregate trade with this country is very con¬ 
siderable. If the pooled lines, however, have agreed to compensate 
each other for the losses, these undesirable ports will be served as 
may be reasonably required. 

4. By equalizing the earnings on large contracts over the 
members of a joint service. As expressed by the New York Com¬ 
mittee, 

Our large manufacturers and exporters have extensive outstanding contracts for 
the supply of rails, locomotives, car material, bridge work, oil, etc., to various ports. 
No one service alone could possibly handle such products. Shippers are often obliged 
at stated periods to make large shipments of a kind of material which would be quite 
unsuitable for a steamer, such as rails, on which the earnings would be much below 
those of succeeding steamers which would carry other portions of construction material 
covered by the same contract, the rates for which would be far more remunerative. 
Only a joint service which could equalize the earnings under the whole contract would 
carry the materials covered by these large contracts without charging freight rates so 
prohibitive as to deprive the American manufacturer of the opportunity of securing 
the contracts in competition with foreign manufacturers. So the conference lines are 
able to maintain their schedules and provide for the export trade even at a loss to the 
individual ship. (Vol. 2, pp. 1368-1369.) 



304 SUMMARY OF CONFERENCES AND AGREElMENTS. 

Disadvantages of Shipping Conferences and Agreements, as Now 

Conducted. 

7. The monopolistic nature of such conferences and agreements .— 
Nearly all the objections advanced against steamship agreements re¬ 
late to the limited monopoly, at least, which the conference lines are 
able to exercise over the trade in their respective areas. Briefly out¬ 
lined the objections advanced under this heading are the following: 

1. All monopolies are liable to abuse, and in our foreign 
carrying trade the monopoly obtained by the conference liues has not 
been subjected to any legal control. While carriers by land are super¬ 
vised and must conform to statutory requirements in the matter of 
rates and treatment of shippers, steamship companies, through 
private arrangements, have secured for themselves monopolistic 
powers as effective in many iustances as though they were statutory. 
Even grantiug the advantages claimed for steamship conferences and 
agreements, all may be withdrawn in the absence of supervisory 
control without the shippers having any redress or protection. The 
lines are under no legal obligation to continue these advantages. 
They exercise their powers as private combinations and are apt to 
abuse the same unless brought under- effective governmental control. 

2. The primary object of such conferences and agreements is 
to prevent new lines from being organized in a trade and to crush 
existing lines which refuse to comply with the conditions prescribed 
by the combmation, or which, for other reasons, are not acceptable as 
members of the conference. The methods which have been adopted 
from time to time to eliminate competition show the futility of a 
weak line attempting to enter a trade m opposition to the combined 
power of the established lines when united by agreement. By resort¬ 
ing to the use of the ^‘fighting ship,’’ or to unlimited rate cutting, the 
conference lines soon exhaust the resources of their antagonists. By 
distributing the loss resulting from the rate war over the several 
members of the conference, each constituent line suffers proportion¬ 
ately a much smaller loss than the one line which is fighting the entire 
group. Moreover, the federated lines can conduct the competitive 
struggle with the comfortable assurance that, following the retirement 
of the competing line, they are in a position to reimburse themselves 
through an increase in rates. To allow conferences, therefore, gener¬ 
ally means giving the trade to the lines now enjoying it. Only a 


SUMMARY. OF CONFERENCES AND AGREEMENTS. 305 

powerful line can hope to fight its way into the trade, and with the 
inevitable result, if successful, that it will join the combination or 
be allowed to exist by virtue of some rate understanding. 

3. Conference Lines, it was asserted to the Committee, are 
enabled to arrange rates arbitrarily, both with reference to the gen¬ 
eral level and particular commodities; and the rates now charged 
were considered excessive^ when compared with rates (1) charged 
by tramp or chartered steamers, or (2) previously charged by line 
steamers in the same trade, or (3) charged by lines in other trades, 
or (4) when considered in relation to the profits of the companies. 
This complaint, however, necessitates the difficult task of deter¬ 
mining what constitutes a ^treasonable rate/’ involving a study of— 

(а) The factors that influence the rise and fall of the general level 
of rates. 

(б) The differences in the nature of the service rendered by liners 
and tramps. 


1 In answer to the summary (vol. 2, pp. 1403-1404) of the many compiaints received by the Committee 
to the effect that the rates are unduly high and that the recent advances in rates have been so out of pro¬ 
portion to the increase in the cost of operation or the demand for additional tonnage as to show the absence 
of all competition in rates, the New York Committee of Conference Line Representatives makes an emphatic 
denial that the recent rise in rates has been arbitrary, and has been effected by the combinations of lines 
with that purpose in view. This Committee maintains that “prior to 1911, freight rates had dropped 
to a figure previously unknown, entailing heavy losses on the regular lines, which had the choice of con¬ 
tinuing their services or withdrawing from the business in which they had long been engaged. Compe¬ 
tition among tramp owners produced a low level of rates, and as soon as the world’s trade got ahead of the 
toimage available, tjjimp steamers were put in a position where they could advance their rates beyond 
anything that had been experienced in recent years.” It is also the contention of the Conference Line 
Representatives that in the enormous rise in ocean rates during recent years, the rates charged by the reg¬ 
ular lines at no time rose to the level of the tramp freight market, and “were less than what the regular 
lines could have earned if they had withdrawn their steamers from their established services and chartered 
or placed them in other trades.” As showing the enormous rise in the charter rates of tramp steamships, 
not working under any agreement or conference, the following represents in part the data furnished by th® 

New York Committee: 


Illustrations. 


Increase in the rate from. 


Petroleum in cases from New York to four ports 
in Australia. 

Cotton from Savannah to Liverpool, Havre and 
Bremen. 

Lumber from the Gulf to the River Plate. 

Cotton from the Gulf to U. K. or Continent on net 
form charters. 

Sugar from Cuba to New York. 

Time charter from Baltimore to Glasgow. 

Full cargoes of grain from Baltimore to Rotterdam. 


17^. per case, June, 1908, to 35^. in Feb., 1913. 

26/3 per net registered ton in Aug., 1908, to 58/9 in 
Nov., 1912. 

95/- per standard in Nov., 1908,125/- in Sept., 1911, 
and 192/6 in Nov., 1912. 

8/6 per ton D. W. of steamer in Nov., 1908, to 25/- 
in Nov., 1912. 

7^. per 100 lbs. in Jan., 1908, to 170. in Nov., 1912. 

3/3 per ton of total dead weight capacity in August, 
1908, to 8/6 in August, 1913. 

1/3 per qr. of 480 lbs. in Sept., 1908, to 3/6 in Jan., 
1913. 


25655®—VOL 4—14 


20 






306 SUMMAEY OF CONFEEENCES AND AGEEEMENTS. 

(c) The character of the vessel and the expensiveness of operating 

I 

the same. 

{d) The stability of rates over a long period of time, chartered 
rates fluctuating much more violently. 

(e) The different conditions surrounding each trade route as 
regards the nature of the service, the quantity of the cargo, and 
the opportunity for effecting combination cargoes. 

(/) What constitutes a fair profit to the line, all factors considered. 

4. Conference lines, through their monopolistic powers, so 
completely dominate the shippers with whom they deal that these 
shippers can not afford, for fear of retaliation, to place themselves 
in a position of active antagonism to the lines by openly giving 
particulars of their grievances. This condition is well illustrated 
by the frequency with which communications, addressed to the 
Committee, referred to the confidential nature of the information 
furnished. The various lines, constituting a conference, have the 
same interests and their organization is effective. Shippers, on 
the contrary, live far apart, and because of their different and 
frequently antagonistic interests can only combine for mutual 
protection with the greatest difficulty. 

5. Conference lines, in view of the absence of competing 
lines, sometimes seem indifferent to the landing of freight in proper 
condition. A considerable number of shippers have complained to 
the Committee that they have experienced endless difficulty in col¬ 
lecting honest claims for damaged goods, loss of goods, or overcharges, 
and that the fines in some cases are extremely arbitrary in making 
settlements. 

6. Conference fines are apt to become increasingly powerful' 
within their respective areas, even to the extent of controlling the 
tramp traffic, until their limited monopoly of to-day will become 
practically unrestricted. It is argued that this tendency has been 
apparent in various trades and that, when the monopoly is complete, 
the fines will appropriate the advantages gained to themselves. 

IL In some conferences the lines have arbitrarily increased their 
rates without giving due notice to the trade, thus causing heavy losses 
on contracts for future delivery, which were based on the freight rates 
prevailing at the time the contracts were made. 


I 


SUMMARY OF CONFERENCES AND AGREEMENTS. 307 

III. Steamship conferences and agreements as now conducted are 
in most instances secret, and shippers have no means of knowing 
whether the conditions claimed by the lines for such conferences and 
agreements are true or not. Conference and*rate agreements, and 
pooling arrangements, should be made with the full knowledge of 
some legally constituted authority in order (1) to safeguard the 
interests of shippers and (2) to make it possible for shippers to file 
complaints without fear of retaliation. 

IV. Some lines grant special rates to large shippers under con¬ 
tracts hosed on such large quantities of freight that small shippers 
can not possibly furnish an equal amount, thus discriminating 
between shippers and preventing competition. 

V. Some of the conference lines do not observe the customary 
conference usages in respect to the equal treatment of shippers in 
rates and special accommodations. 

VI. The policy of many conference lines not to publish their 
tariffs or classifications, although such publication would prove a 
great convenience to shippers and would constitute a guarantee 
that rates were not altered or articles transferred from one class to 
another, for the benefit of favored shippers. 

VII. That deferred rebate systems are objectionable and should be 
prohibited for the following reasons: 

(1) By deferring the payment of the rebate until three or 
six months following the period to which the rebate applies ship 
owners effectively tie the merchants to a group of lines for successive 
periods. In this connection it is argued that the ordinary contract 
system does not place the shipper in the position of continual depend¬ 
ence that results from the deferred rebate system. 

(2) That the system is unnecessary to secure excellence 
and regularity of service, a considerable number of conferences 
being operated to-day wdthout this feature. 

leading Recommendations of Witnesses for Proposed legislation. 

Government regulation of carriers engaged in the American foreign 
trade. —The consensus of opinion, as expressed in the testimony of 
witnesses and in the numerous communications received by the Com¬ 
mittee from shippers, is overwhelmingly in favor of some form of 


308 


SUMMARY OF CONFERENCES AND AGREEMENTS. 


government regulation of steamship carriers engaged in this country’s 
foreign trade. Nearly all the steamship line representatives, who 
appeared before the Committee, expressed themselves as not opposed 
to government supervision which is reasonable and which is limited 
to the requirements of full publicity and approval of all agreements 
or arrangements which steamship lines may have entered into with 
other steamship lines, with shippers, or with other carriers and trans¬ 
portation agencies. On the other hand, the shippers who appeared 
as witnesses, or otherwise submitted recommendations for proposed 
legislation, were in the great majority of instances favorable to a 
comprehensive system of government supervision, sufficiently broad 
to embrace the regulation of rates without actually fixing them, 
the approval of contracts, agreements and arrangements, and the 
general supervision of all conditions of water transportation which 
vitally affect the interests of shippers. While few of the shippers 
who communicated with the Committee by letter (and the same 
may be said of witnesses) attempted to specify the details of their 
recommendations, they are almost a unit in stating that they are 
convinced of the desirabihty of having the Interstate Commerce 
Commission, or a similar commission, exercise a general supervisory 
power over foreign water carriers and enforce among the conference 
lines at all times the various contentions which they have claimed 
for themselves during the hearings before the Committee. It is 
noteworthy that only five of the many communications received 
by the Committee, which were unfavorable to steamship agree¬ 
ments and conferences as now conducted, display an attitude of 
hostility toward government regulation. In fact, many of the com¬ 
munications received from shippers make it clear that the writers 
regard the contentions of the conference line representatives as 
advantageous to shipper and shipowner if they are honestly and 
fairly carried out, but state that their experience has been to the 
effect that, once the combination of lines is established, it is apt 
to be used in an arbitrary and unfair way by favoring some large 
corporation or friend to the detriment of other shippers. Such 
discriminations and arbitrary treatment, it is beheved, can only be 
ehminated by the estabhshment of some legally constituted author¬ 
ity which is empowered to hear complaints and to order the dis¬ 
continuance of abuses. 



SUMMARY OF CONFERENCES AND AGREEMENTS. 309 

Impracticability of Uling rates with the government and requiring 
a period of notice before changing the same.' —With few exceptions, 
steamship representatives and shippers, who testified before or com¬ 
municated with the Committee, were opposed to legislation which 
would require the steamship lines engaged in our foreign trade to file 
their rates with the government and be obliged to change the same 
until after a certain period of notice to make a change has been given. 
Such a policy was generally regarded as impossible, in view of the 
ever present competition of tramp vessels in our international trade, 
unfair to the regular lines which require protection against the 
attacks of such tramp vessels, and particularly objectionable to 
American exporters, who in competing with foreign markets, are often 
dependent upon an immediate and favorable freight rate quotation in 
order to close their contracts. In support of this contention the 
following arguments were emphasized before the Committee: 

(1) The nature of the steamship business is so essentially 
different from that of the railroads that any limitation upon the 
freedom of ocean carriers to change their freight rates promptly to fit 
the changing conditions of the freight market would prove injurious 
to shipowners, shippers and consignees. As pointed out by the New 
York Committee: 

Ocean freight rates vary not merely from month to month, but from day to day and 
from hour to hour, especially with reference to the great staples which are traded in on 
the exchanges. 'The difference of a fraction of a cent in the freight rate may mean the 
loss of a contract to a merchant or manufacturer at an interior point in the United 
States who is competing with manufacturers and merchants in other countries. In 
the development of new countries the American manufacturer of steel cars, locomo¬ 
tives, car materials, bridge work, etc., is competing not only with merchants in this 
country but with Canada, Russia, Australia and Argentina. Unless the carriers are 
free to quote such merchants freight rates which will enable them to compete success¬ 
fully with the business of the merchants of other countries the lines will suffer serious 
detriment. (Vol. 2, p. 1373.) 

(2) World conditions govern ocean transportation. While 
steamship agreements and conferences admittedly limit competition 
among the parties to the agreement or the members of the conference, 
many bulk articles are carried by tramp vessels which operate wher¬ 
ever freight is offered and at constantly changing rates, and no law 
can with justice restrict the operations of the so-called regular lines 
and not at the same time be made applicable to the tramp. 




310 


SUMMABY OP CONFEBENCES AND AGBEEMENTS. 


(3) The fixing of hard and fast rules in the naming of rates 
in ocean transportation is impracticable because the unit of transpor¬ 
tation by water is the total capacity of the ship, and, imlike the 
practice in rail transportation, it is impossible to cut off any tonnage 
space when its use is found unnecessary. Since the ship must be 
considered a unit, any restraint upon the lines in the naming of their 
rates would seriously interfere with the economical and safe loading 
of the vessels and the proper combination of weight and measurement 
cargo. Numerous steamship representatives have testified to the 
effect that certain classes of freight, such as grain, must frequently 
be secured on short notice and at greatly reduced rates in order to 
properly load the vessels to their marks. 

(4) The position of steamship lines differs from that of 
railroads in that the vehicle of carriage has a charter value which 
must always be kept in mind. Moreover, railroads enjoy property 
rights acquired often at the expense of the state, operate by virtue 
of special privileges, and should therefore be held to the performance 
of the functions for which they were created. Steamship lines, on the 
other hand, are not tied like the railroads to a definite route of travel, 
i. e., vessels are not fixtures in any trade and are not limited in their 
operation to any fixed line. They have received no public aid or 
franchise, are essentially enterprises of a private nature, and are not 
bound to maintain a definitely prescribed service. The vessels may 
come and go by whatever route or in whatever direction they please 
and the only incentive to engage in any particular trade is to develop 
that trade to a point where the profit will justify the operation of a 
regular and continuous service. In view of these circumstances, 
it is argued, steamship lines can not be bound to an impossible propo¬ 
sition, and if the fixing of rates should result in the imposition of 
conditions which embarrass a particular trade, or render it less profit¬ 
able, it is but natural that the vessels would be transferred to trades 
where commerce is unrestrained and yields’the largest profits. It 
was the consensus of opinion of the leading steamship line represen¬ 
tatives that any attempt to prescribe rates would cause a serious 
set-back to our export trade; that no legislation could be enacted 
which could compel the lines to operate a stated number of vessels 
and a service of prescribed efficiency; and that unless the lines are 
allowed to transact their business with the freedom believed neces- 



SUMMARY. OF CONFERENCES AND AGREEMENTS. 


311 


sary, American exporters might find themselves in the unhappy 
position, while allowed low and favorable rates, of being unable to 
procure sufficient bottoms for the exportation of their goods. 

Some of the leading steamship line representatives took the 
view that tariffs and rates might be filed with some designated 
commission, and be pubUc, provided the lines be permitted to vary 
from these rates whenever necessary and without notice to, or author¬ 
ity from, such governmental authority. Thus, according to the 
testimony of Mr. P. A. S. Frankhn, vice president of the International 
Mercantile Marine Co., 

the only thing we feel could possibly be done—and I do not know whether the majority 
of the shipping trade agree with me—is the question of filing the rates at some place 
in Washington for general supervision to which shippers could apply and see what 
rates are in force at the time and what other people are getting. We feel there is no 
other way to conduct our business except by working together in the manner in which 
we are now working. 

Mr. Franklin continued to state that rebating or other discrimina¬ 
tion between shippers in any trade should be prohibited absolutely, 
and in this connection justified the filing of rates in the following 
words: 

The object in filing the rates would be that there is the rate of that day. We would 
have to prove in the case of any difficulty that we offered to a shipper that rate on that 
day, that everything was equal to all, and that there was an equal chance to every¬ 
body to ship at that time. We might get all the freight we wanted to-day, and-we 
might be out of the market to-morrow. (Vol. 1, pp. 625-626.) 

Publicity of agreements and arrangements .—The steamship line 
representatives who testified before the Committee were almost a 
unit in their contention that cooperation among the lines through 
agreements relating to rates and methods of doing business are 
necessary for the economical and efficient handling of our foreign 
trade. In view of the almost universal existence of such agreements 
'or understandings it was the general consensus of opinion that 
agreements should be permitted, and that, whenever entered into, 
all agreements and contracts between steamship lines, or between 
such lines and any shipper, railroad or other transportation agency, 
should be filed with the government for approval, or be subject to 
call by the government at any time, with the understanding that 
the same can be ordered canceled if any feature thereof should 



312 


SUMMARY OF CONFERENCES AND AGREEMENTS. 


be considered wrong or unfair.^ In other words, they believed 
that the hnes should be permitted to make contracts with the 
knowledge that the same must be filed or are subject to call, thus 
giving the government the power to determine the merits of any 
complaints that may be brought, which power should be supple¬ 
mented with the right to order abuses removed and to protect the 
complainants against any disciplinary measures which certain hnes 
might wish to inflict. 

Publicity of agreements was supported before the Committee not 
only by most steamship line representatives, but had the indorsement 
of numerous exporting and importing firms. (Vol. 2, p. 1407.) 
Even witnesses like Mr. Elijah Warfield, Vice President and General 
Manager of the Seaboard & Gulf Steamship Co., and Mr. H. H. 
Haines, Traffic Manager of the Galveston Commercial Association, 
whose testimony was unfavorable to agreements and conferences as 
now conducted, regarded it as absolutely essential that lines engaged 
in the foreign trade should be permitted to enter into some sort of 

1 The following three extracts from the testimony before the Committee will indicate the attitude of 
leading steamship representatives relative to the publicity of agreements: 

Mr. R. P. Schwerin, Vice president of the PaclQc Mail S. S. Co., testified: think that everybody in the 
foreign trade would be only too glad to file their arrangements with a designated department of the govern¬ 
ment and take up with the government any question that required further explanation or further modi¬ 
fication, with the knowledge that the government would permit them to carry on their legitimate business 
without the necessity of putting in private rates and rebates; they would be only too glad to be relieved 
of any obligation to make private rates and pay rebates.” (Vol. 2, p. 908.) 

Mr. Paul Gottheil, representing Punch, Edye & Co. and Chairman of the Committee appointed by 
steamship line representatives to report to the Committee on the Merchant Marine and Fisheries on the 
advantages and disadvantages of agreements and conferences, testified: “I believe that it would meet the 
Issue if it was only exacted that agreements should be filed. I believe furthermore, however, that what 
ever the department may be, they should keep these agreements and consider them as private. In England, 
when an investigation was held, agreements were stnrendered very freely, for the simple reason that nothing 
was published. It does not seem fair that everybody should know everybody else’s business. I think 
that imder these conditions publicity would meet the question and prove satisfactory.” (Vol. 1, p. 384.) 

Mr. P. A. S. Fra nklin , Vice president of the International Mercantile Marine Co., testified: “I feel that 
the present position of the steamship companies is rather an unfortunate one, where all their agreements 
are looked upon with suspicion, more because the other fellow does not know what is in them than because 
of what is really in them, and I think, as far as agreements pertaining to business from the United States 
are concerned, it would not be at all prejudicial to business to have them filed. ... I do not see any 
serious objection to publicity, because I believe that all these agreements that so much fqss has been made 
about are all absolutely reasonable and good economic propositions for the commerce of the United States 
both east and west boimd. If they are not, that is all the more reason why they should be known; that 
b why I am in favor of filing the eastbound agreements. I do not like to say anything about the west¬ 
bound situation. It b not one we have any control over here; but as far as the eastbound situation b 
concerned we do practically control that, and I see no objection to flHng the agreements and fiHw g our 
rates of freight. I do see very serioiis obstacles and objections to having rates and not subject to 
change without notice.” (Vol. 1, pp. 626,627.) 




SUMMARY OP CONFERENCES AND AGREEMENTS. 313 

cooperative agreement, but that all arrangements should be known 
to the government and be subject to its regulation. The great 
majority of the supporters of pubhcity, however, took the view that 
the agreements, when obtained by the government, should be kept 
private and not advertised broadcast on the ground that it is unfair 
for every line to know every other line’s business. 

Other recommendations .—The remaining suggestions offered to the 
Committee for proposed legislation deal primarily with the elimination 
of discrimination between shippers. Briefly stated, it was the con¬ 
sensus of opinion that discrimination between shippers in the matter 
of rates and cargo space should be absolutely prohibited, and that 
the relations between the lines and shippers should not be the subject 
of private and secret negotiations between the parties. Although 
the difficulty of enforcement was generally admitted, it was fre¬ 
quently suggested that the lines should be compelled to accept cargo 
from all shippers when offered with due regard to the proper loading 
of the vessel and the tonnage available, and should be prohibited 
from refusing accommodations to any shipper by way of retaliation 
because he may have shipped by an independent line, or may have 
filed a complaint charging unfair treatment, or for other unjust 
reasons. 

While rebating, as commonly understood, was universally con¬ 
demned, there was considerable division of opinion as to the d^'sha- 
bility of permitting the use of deferred rebate systems. Most of the 
conference line representatives, on the one hand, upheld the use of 
such rebates, especially in the long-distance trades, on the plea that 
they are equally available to all shippers, irrespective of the size of 
shipments, and are often necessary to the protection of the lines 
(which in order to furnish a regular, speedy and efficient service at 
uniform rates must be assured of the constant support of the ship¬ 
pers in the given trade) against sporadic attacks of tramp vessels 
which have no permanent interests to conserve and which, unless 
shippers can be prevented from patronizing them, can easily disor¬ 
ganize and make unprofitable a regular line service. On the other 
hand, the witnesses identified with independent steamship line proj¬ 
ects, such as Messrs. Sidney Story, William Lowry, and Joseph J. 
Slechta, strongly opposed such rebates, even though they apply only' 
to our import trade, on the ground that they effectively preclude 
any independent line from obtaining return cargo, thus making it 



314 SUMMAKY OF CONFERENCES AND AGREEMENTS. 

impossible for the line to realize anything but a heavy loss on the 
round voyage. It should be stated here that small shippers must 
depend to an increasing extent upon regular line services, and that 
the tramp vessel is rapidly becoming the carrier for large bulk cargoes. 
Most of the important complaints from shippers against deferred 
rebates have come from large firms whose shipments are frequently 
of such size as to justify the employment of tramp steamers. These 
firms object to being tied to the regular lines to the exclusion of the 
use of tramps. In other words, they wish to employ a tramp when¬ 
ever it suits their convenience, at the same time insisting that the 
regular lines, whose service is naturally dependent upon the regular 
support of shippers, be ready at aU times to take their shipments 
when they do not desire to use tramps, i. e., they insist on the regular 
lines carrying out their promises relative to speed, good service and 
regularity, without, however, being able to rely upon the shippers’ 
constant support. 


PART II. 

Steamship Company Affiliations in the 
American Domestic Trade. 


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CHAPTER XI. 

STEAMSHIP COMPANY AFPILIATIONS ON THE GREAT LAKES. 


Control of the Through-Package Freight Business by Railroad-Owned 

Boat Lines. 

Enumeration of raUroad-owned steamship lines. —Although nu¬ 
merous independent steamship lines operate in the local port-to-port 
traffic on the Great Lakes, the through traffic from the western gate¬ 
ways on the Lakes, such as Chicago and Duluth, to the eastern sea¬ 
ports via Buffalo, is controlled exclusively by six boat lines owned 
by the trunk-line railroads connecting the east and central west. 
(Vol. 2, pp. 841, 1225.) These six lines, representing a total of 63 
vessels of 180,007 gross tons, are the following: The Erie Railroad 
Transit Line, operating between Buffalo and Chicago, and owned 
and operated directly by the Erie Railroad Co.; the Erie & Western 
Transportation Co. operating between Buffalo and Duluth and Buf¬ 
falo and Chicago, and controlled by the Pennsylvania Railroad and 
Northern Central Railway Cos.; the Lehigh Valley Transportation 
Co., operating between Buffalo and Chicago, and owned exclusively 
by the Lehigh Valley Railroad Co.; the Mutual Transit Co., operat¬ 
ing between Buffalo and Duluth, and owned entirely by the Mutual 
Terminal Co. of Buffalo, the stock of which company, in turn, is 
owned jointly by the New York Central, the Lehigh Valley, the 
Erie, and the Delaware, Lackawanna & Western Railroad Cos., each 
owning one-fourth of the capital stock; the Rutland Transit Co., 
operating between Ogdensburg and Buffalo and Chicago, and owned 
entirely by the Rutland Railroad Co., which, in turn, is owned by 
the New York Central and the New York, New Haven & Hartford 
Railroad Cos.; and the Western Transit Co., operating between 
Buffalo and Duluth and Buffalo and Chicago, and owned entirely 
by the New York Central & Hudson River Railroad Co. (For de¬ 
tails of the railroad ownership of these lines, and the intermediate 
ports served, see the following table.) 


317 



318 STEAMSHIP COMPANY AFFILIATIONS ON THE GREAT LAKES. 


LEADING LAKE LINES CONTROLLED BY AMERICAN RAILROADS. 


Name of steam¬ 
ship line. 

Number 

JeU. 

Total 

gross 

tonnage 

Nature of railroad 
control. 

Route between — 

Erie R. R. Transit 
Line. 

8 

20,553 

Owned and operated 
directly by the Erie 
R. R. Co. 

Buffalo and Chicago, 
calling at Fairport, 
Cleveland, Manito¬ 
woc (eastbound), 

and Milwaukee. 

Erie & Western 
Transp. Co. 

13 

43,656 

Of $3,000,000 of capi¬ 
tal stock outstand¬ 
ing the Penna. R. 
R. Co. owns 
$2,495,150 and the 
Northern Central 
Ry. Co. $500,000. 

(1) Buffalo and Du¬ 
luth, calling at Erie, 
Cleveland, Detroit, 
Mackinac Island, 
Sault Ste. Marie, 
Marquette, Dollar 
Bay, and Houghton. 

(2) Buffalo and Chi¬ 
cago, calling at Erie, 
D etroit( westbound), 
and Milwaukee 
(eastbound). 

Lehigh Valley 
Transp. Co. 

7 

19,211 

All capital stock 
($1,510,000) and 
bonds ($489,000) are 
owned by the Le¬ 
high Valley R. R. 
Co. 

Buffalo and Chicago, 
calling at Manitowoc 
and Milwaukee. 

Mutual Transit Co. 

12 

32,190 

Mutual Terminal Co. 
of Buffalo owns all 
of its stock ($40,000) 
and bonds and notes 
($2,556,000). The 
Mutual Terminal 
Co. is owned jointly 
by the New York 
Central & Hudson 
River R. R. Co., 
Lehigh Valley R.R. 
Co., Erie R. R. Co., 
and Del., Lacka¬ 
wanna & Western 
R. R. Co., each 
owning one-fourth 
of its capital stock. 

(1) Buffalo and Du¬ 
luth, stopping at 
C1 e V e land (west¬ 
bound), Portage, De¬ 
troit (eastbound), 
and Fairport (east- 
bound). 

(2) Buffalo and Glad¬ 
stone, calling at 

C1 e V e land (west¬ 
bound), Windsor, 
Green Bay, Detroit 
(eastbound), and 
Fairport (east- 
bound). 

Rutland Transit 
Co. 

, 

8 

16, 745 

All capital stock 
($1,0 0 0,0 0 0) is 
owned by the Rut¬ 
land R. R. Co., a 
majority of whose 
stock, in turn, is 
owned by the New 
York Central and 
the New York, New 
Haven & Hartford 
R. R. Cos. During 
1912 the company 
leased six vessels 
from the Western 
Transit Co. 

Ogdensburg and Chi¬ 
cago, calling at Buf¬ 
falo and Milwaukee. 

t 

• 


















STEAMSHIP COMPANY AFFILIATIONS ON THE GKEAT LAKES. 319 


LEADING LAKE LINES CONTROLLED BY AMERICAN RAILROADS— 

Continued. 


Name of steam¬ 
ship line. 

Number 

of 

vessels. 

Total 

gross 

tonnage. 

Nature of railroad 
control. 

Route between — 

Western Transit 
Co. 

15 

47,652 

Outstanding capital 
stock of $1,000,000 
owned entirely by 
the New York Cen¬ 
tral and Hudson 
River R. R. Co. 

(1) Buffalo and Du¬ 
luth, calling at vari¬ 
ous inter mediate 
ports. 

(2) Buffalo and Chi¬ 
cago, calling at Mil¬ 
waukee. 


In addition to the above-named standard lines mention should be made of— 

(1) The Mackinac Transportation Co., operating two steamers of 4,189 gross 
tons, between Mackinaw City and St. Ignace, across the Straits of Mackinac. 
The entire capital stock is owned by the Michigan Central, Grand Rapids & 
Indiana, and Duluth, South Shore & Atlantic R. R. Cos., each owning one-third 
of the stock. 

(2) The Northern Steamship Co., whose entire capital stock of $1,500,000, 
except the directors’ qualifying shares, is owned by the Great Northern Rail¬ 
way Co. The two steamers, with a combined gross tonnage of 8,488 tons, main- . 
tain a strictly passenger service between Chicago and Buffalo. The Mutual 
Transit Co. acquired the freight vessels of this company. 

(3) The car ferries of several railroad companies for the transportation of 
freight in car loads, without breaking bulk, between various points on Lake 
Michigan. 

Methods hy which the railroads^ owning standard lake lines^ have 
prevented independent water carriers from participating in the 
through package freight traffic. —Up to the time that the trunk 
railroad lines reached only to Buffalo, and had no interest in the rail 
lines to the west of Buffalo, it was to their interest to maintain the 
Lake lines in such a manner as to attract the largest amount of ton¬ 
nage to Buffalo. But, with the extension of their rail lines to the 
west, their policy changed; and, instead of attracting all possible 
tonnage to the Lake lines connecting Buffalo and the west, every 
effort was made to divert water-borne traffic to their rail lines and to 
prevent independent water carriers from securing an important 
foothold. 

In the effort to prevent competition by independent lines, it should 
be noted in the first place that the railroad-owned lines are favored 
by the fact that the transportation of general merchandise requires a 
particular type of steamer, i. e., one which has several full-length 
decks, whereas the modern bulk freighters, with a view to avoiding 
interruptions in rapid loading and unloading, must have as few com¬ 
partments and divisions as possible. The numerous bulk carriers on 














320 STEAMSHIP COMPANY AFFILIATIONS ON THE GREAT LAKES. 

the Lakes are thus not adapted to compete in the transportation of 
general merchandise; and this situation, combined with the further 
fact that most of the general merchandise traffic originates on the 
railroads at some distance from the terminals of the water carriers, 
has given the railroads a greater control over this class of freight 
and the special type of vessel used. As Mr. Julius H. Barnes, Chair¬ 
man of the Traffic Commission of the Duluth Chamber of Commerce, 
testified before the Committee, “ so long as this class of freight 
originates on the railroads and is controlled by them, it is in their 
power to say to whom they will give it. They will not share it with 
any individual carrier that might offer, and they have thus controlled 
its movements.” (Vol. 2, p. 842.) Similarly, the Chicago Harbor 
Commission in its consideration of railroad control over Lake trans¬ 
portation between Chicago and Buffalo reported that, “ only boats 
owned by the railroads may engage in the package freight business 
between Chicago and Buffalo. If these two cities were both destina¬ 
tion points for traffic, of course nonrailroad-owned vessels could not 
be excluded from competition. But Buffalo is not a destination point. 
It is a transfer station. Goods reaching Buffalo by lake must go east 
by rail or canal. Likewise, freight from the east reaching Chicago 
water-borne must be brought to Buffalo by rail or canal. The rail¬ 
road makes with its own boat lines a through route and a joint rate 
from Chicago to the eastern destination, or vice versa.” (Report 
of the Chicago Harbor Commission, 1909, p. 187.) In fact, all the 
testimony before the Committee is to the effect that the through 
transportation of strictly package freight on the Lakes is completely 
under the control of the railroad-owned lines. 

Having become masters of the water-borne package freight busi¬ 
ness between Chicago or Duluth and Buffalo for transshipment to the 
seaboard, the railroads began the attempt in 1908 to secure control 
of the large grain movement to the east via the Lakes, a traffic 
handled largely by tramp steamers which seek to make their rates 
from port-to-port without reference to rail transportation. The policy 
of the railroads in this respect is to charge more for the local haul 
from Buffalo to the seaboard on grain that is taken to Buffalo by 
boat, than the proportionate share of the all-rail haul from Chicago 
to the seaboard. The effect of this policy is twofold, viz, (1) to 
divert the movement of grain from the Lakes to the railroads, and 


STEAMSHIP COMPANY AFFILIATIONS ON THE GREAT LAKES. 321 

(2) to make the local rate between Buffalo and the eastern destina* 
tion so high as to leave little to the independent water carrier for 
its local lake haul after paying the rate for the local rail haul. 

While asserting that the railroad companies can not control the 
movement of grain in the sense that they dominate the transportation 
of general merchandise, INIr. William M. Hopkins, Manager of the 
Transportation Department of the Chicago Board of Trade, testi¬ 
fied before the Committee that “ in effect the rail carriers do control 
the rates of transportation and take away the value of cheap transpor¬ 
tation on the Lakes by reason of their control of the connecting rail 
transportation beyond the Lakes ” (Vol. 2, p. 1225) ; and recommended 
that a statute be passed “ whereby the railroad companies should 
not be permitted to charge more for the same service on water¬ 
borne traffic, on the same commodities, than they charge on all-rail 
traffic” (Vol. 2, p. 1228). He explained that in the case of package 
freight from Chicago to the seaboard, where joint through rates 
are used in both the all-rail and lake-and-rail hauls, “ the pro¬ 
portion which the rail lines east of Buffalo earn out of their all-rail 
rate is the same they earn as their proportion of the through lake- 
and-rail rate.” (Vol. 2, p. 1225.) But in the case of grain, as he 
testified, “ we have no joint through tariffs at all. The railroads have 
what they call an ex-lake rate, i. e., a rate on property coming off the 
Lakes which refers particularly to grain; and that ex-lake rate is 
materially higher than their proportion of the all-rail grain rate 
that they earn easterly from Buffalo. So much so that while the rates 
for transportation on grain are very low from Chicago to Buffalo, the 
rates from Buffalo to the east are so high as to take away the advan¬ 
tage of that water transportation and thus actually make your 
aggregate cost of transportation by lake and rail higher than the 
all-rail rate.” (Vol. 2, p. 1226.) 

Thus, in the case of oats, using Mr. Hopkins’ illustration, the rate 
from Chicago to Buffalo by tramp steamer is approximately 3 cents 
per hundred pounds, and the local rail rate from Buffalo to Phila¬ 
delphia is 14 cents, or a through lake-and-rail rate of 17 cents as 
contrasted with a through all-rail rate from Chicago to Philadelphia 
of 14 cents, thus making it cheaper by 3 cents a hundred pounds to 
ship all-rail than by lake-and-rail. The difference, as explained by 
Mr. Hopkins, “ is accounted for wholly by the proportion east of 
25655 “— VOL 4—14 - 21 



322 STEAMSHIP COMPANY APEILIATIONS ON THE GREAT LAKES. 

Buffalo, because out of that 14 cents, all-rail, the line from Buffalo 
to Philadelphia will accept about cents as the proportion of the 
all-rail rate; but when the same traffic originating at the same point 
and for the same transportation service from Buffalo to Philadel¬ 
phia comes off the Lake they want 14 cents for it. The same situa¬ 
tion exists as to Boston.” (Vol. 2, p. 1226.) Mr. Julius H. Barnes 
likewise testified with reference to the Duluth grain traffic that the 
railroads pursue a policy of not taking grain at the same rate from 
Buffalo to New York when delivered to them ex-rail, and that they 
will haul the grain for the balance of the through route from Buffalo 
to New York much cheaper for their own steamers than for an inde¬ 
pendent Lake carrier. He further testified that when their inde¬ 
pendent City Line attempted to carry flour to the east they were 
unable to unload anywhere except at the railroad dock in Buffalo, and 
that they were charged “ 11 cents east of Buffalo, whereas the rail¬ 
roads east of Buffalo were carrying flour delivered by their own 
Lake steamers at 9.2 cents, plus the switching charge of $1.50.” 
(Vol. 2, pp. 843 and 850.) 

This discrimination against the grain coming off the Lakes, Mr. 
Hopkins asserted, could not be justified by reason of extra terminal 
charges, such as the cost of unloading and reloading, because, as he 
testified, “ you can take grain and stop it at Buffalo, put it into an 
elevator, keep it there for 12 months, and then take it out of the 
elevator and get it through on a total through charge of 14 cents. 
That is what they call the transit privilege for the purpose of drying 
it or milling it in transit, or for some other purpose. So the terminal 
service at Buffalo is exactly the same in that transaction as would 
be performed if you had two local transactions, or the transporta¬ 
tion of grain coming off the Lakes and then going all-rail. * ♦ ♦ 

If the ex-lake grain was put in an elevator and transshipped it 
would be exactly the same, so that the transportation service would 
be performed to the same extent in both cases. It would not be 
exactly true if a shipper does not stop at Buffalo at all. If the all-' 
rail transaction went through, then you would not have quite as 
much expense as-you would have on the water-borne traffic. The 
difference would be in the terminal service, and the difference in the 
cost of service in the case of oats would be measured by the cost 
of the switching rate, which is approximately $1.50 a car of about 


STEAMSHIP COMPANY AFFILIATIONS ON THE GEEAT LAKES. 323 

40,000 pounds, or about one-tenth of 1 per cent.” (Vol. 2, p. 1227.) 
Despite the foregoing data, however, Mr. Hopkins emphasized the 
fact that the Interstate Commerce Commission upheld the practice 
of the railroads on the ground that the water-borne traffic was local 
traffic to the railroads at Buffalo, and that so far as the railroads 
were concerned this traffic must be regarded as originating in Buf¬ 
falo, thus giving them the right to charge more on the local haul 
than they would if the transaction was considered as a portion of 
the through haul. (Vol. 2, p. 1228.) This ruling of the Interstate 
Commerce Commission Mr. Hopkins opposed on the ground that the 
through rate should be made the aggregate of the two local rates (one 
on the lake haul and the other on the rail haul), less the terminal 
cost on these local transactions which, as he pointed out, is much 
less than the present discrimination. To permit the present prac¬ 
tice, according to his testimony, means that the railroads, while 
making joint lake-and-rail and all-rail through rates on merchan¬ 
dise, since they control the entire business, can refuse to make joint 
rates on the grain traffic, because they do not control this entire 
business, thus in fact controlling the grain traffic and driving it from 
the Lakes to the all-rail lines by the imposition of excessive charges 
on water-borne grain eastward from Buffalo. 

But even if independent carriers should manage to overcome all 
other obstacles, the railroads are still in a position to effectively con¬ 
trol independent water carriers by refusing to give them the benefit of 
their dock facilities at Buffalo both for the discharging and receiving 
of cargo, the independent carrier thus being required, in addition to 
the other disadvantages already enumerated, to unload at some other 
dock and team the goods to or from the railroad station. To make 
the situation worse, the railroads have secured nearly all the water 
frontage in Buffalo available for dock purposes. According to the 
Commissioner of Corporations,^ the most important frontage and 
wharves of Chicago and Duluth belong to the railroads; while with 
reference to Buffalo, 

about half of the active river frontage is owned by railroads, with some small 
holdings by water lines. Of the 5 miles on the two sides of the city ship canal, 
4 miles are owned by railroads on the lake front. The total frontage protected 

1 Pages 25-26 of the Report of the Commissioner of Corporations on water terminals. 
Sept. 26, 1910. 



324 STEAMSHIP COMPANY AFFILIATIONS ON THE GREAT LAKES. 

by breakwaters is about 4 miles of which the railroads own about 3, subject to 
some disputes as to title. The city owns about three-fourths of a mile, but, 
with the exception of two blocks, practically none of its frontage can be reached 
without crossing railroad property. * * * Por some years there appeared 

to exist a well-defined combination between the railroads, their water lines, 
and most of the elevators at Buffalo, by which the railroads were able to in¬ 
fluence materially the grain traffic there, and use that influence against the Erie 
Canal. Just how far this situation still exists is not clear, but there is some 
reason to believe that the railroads continue to exert a considerable control over 
the grain traffic. ♦ ♦ ♦ The situation at Buffalo is due in considerable 

degree to the fact that the railroads largely control terminals as well as im¬ 
portant water lines, refuse to prorate with independent water lines, and refuse 
the use of their docks unless the freight goes over their lines.' 

The situation referred to by the Commissioner of Corporations was 
fully substantiated by Mr. William M. Hopkins of Chicago and Mr. 
Julius H. Barnes of Duluth, both testifying before the Committee 
to the effect that even the elimination of all other discriminating 
practices would not bring about the existence of an independent 
through-package freight service, unless the independent carrier is 
given the use of docks on an equal basis with the railroad-owned 
lines. Mr. Hopkins, in particular, testified that “tl^ie independent 
carrier does not and can not carry merchandise to-day, because he has 
no docks. There are some privately owned docks which he could 
use at Chicago, but when he gets to Buffalo he has no place to unload. 
All the docks are owned by the rail carriers at Buffalo and they will 
not permit the use of those docks by the independent carriers, except 
at an exorbitant charge. The result is there is no through package 
freight carried on the Lakes by the independent vessels.” (Vol. 2, 
p. 1236.) 

Railroad control of the Erie Canal .—In view of the railroad con¬ 
trol of the standard through Lake lines, as well as the lake haul east¬ 
ward of Buffalo, it may be asked: Can not independent Lake carriers 
utilize the Erie Canal route for shipments from the West to the sea¬ 
board? The answer is that this route is also completely dominated 
by the railroads as far as through traffic is concerned. Although at 
one time this waterway served as an important connecting link be¬ 
tween the West and the East and exerted a powerful influence on rail 
rates, the railroads as early as 1878 sought to control this traffic, and 

1 Pages 25-26 of the Report of the Commissioner of Corporations on water terminals, 
Sept. 26, 1910. 




STEAMSHIP COMPANY AFFILIATIONS ON THE GREAT LAKES. 325 

since that time have lost no opportunity of diverting the canal traffic 
to their own lines by one method or another. Their control of the 
Erie Canal has become so effective that the carriage of through 
freight on the canal, i. e., freight originating outside of the State of 
New York, has, according to the findings of the New York Barge 
Canal Terminal Commission, almost reached the vanishing point.” 
Thus, during the year 1910, which is representative of recent years, 
the shipments of both through and way freight on the State canals of 
New York totaled only 3,473,412 tons, and of this only 805,180 tons 
represented through freight. In other words, the way freight, i. e., 
freight to or from points on the canals, was 3.31 times the through 
freight, thus showing that the Erie Canal has become relatively un¬ 
important as a route for the carrying of freight between the Great 
Lakes and the Atlantic Seaboard. (Report of the New York Barge 
Canal Terminal Commission, 1911, Vol. I, pp. 63-64.) 

This declining importance of the canal is largely due, as already 
pointed out, to the efforts of the railroads to divert the traffic to their 
own lines, and the following factors may be briefly mentioned as indi¬ 
cating the methods which the railroads have pursued in accomplish¬ 
ing this purpose: 

(1) The railroads secured control of the so-called canal boat 
lines, the Erie Railroad having acquired the Union Steamboat Canal 
Line in about 1878; the New York Central having acquired the West¬ 
ern Transportation Co. doing both a canal and lake business, and 
later known as the Western Transit Line; the Pennsylvania Railroad 
Co. having organized the Plajiet Line, later known as the Western 
States Line; and the Lehigh Valley Railroad Co. having organized 
the Diamond Despatch in 1892. At present there are four so-called 
railroad canal “ lines ” operating on the Erie Canal (really, however, 
constituting only railroad forwarding agencies), viz, the Western 
Transit Line (New York Central Railroad), the Erie Railroad Transit 
Canal Line (Erie Railroad), the Western States Canal Line (Penn¬ 
sylvania Railroad), and the Diamond Despatch (Lehigh Valley 
Railroad).^ In reality the canal boats are owned by individual cap¬ 
tains, who obtain their through westbound freight almost entirely 
from the above-mentioned‘railroad forwarding agencies, which own 


1 Report of the Commissioner of Corporations on the control of Water Carriers by 
Railroads and Shipping Consolidations, Dec. 23, 1912, pp. 57-58. 



326 STEAMSHIP COMPANY AFFILIATIONS ON THE GEEAT LAKES. 

no boats but only solicit freight from shippers, and which charter the 
canal boats from the individual owners. Moreover, the freight sent 
on such chartered boats, according to the New York Barge Canal 
Terminal Commission, consisted mainly of “ commodities for ship¬ 
ment to or west of Buffalo which could not bear the rates charged by 
the railroads.” In such cases, according to the report of the Com¬ 
mission : 

The agents of the railroads would contract for the shipment of this freight as 
far as Buffalo by canal boats, and thus, in the vernacular of the canal world, 
there came to be known what were termed “ canal lines,” but which were not 
lines at all, but consisted of individually owned canal boats, intermittently char¬ 
tered by the railroads, for the carriage of the commodities as far as Buffalo. 
As it is essential that canal boats should have a certain amount of freight in 
them in order that they may pass under the bridges of the canal, they were 
always glad to be thus chartered by the railroad agents, and the latter, on the 
other hand, were generally able to drive a hard bargain as to westbound rates 
with these canal boat owners. But, so few are the boats now operating upon the 
canals, that the “ canal lines,” once the fictitious property of the railroads, have 
almost disappeared. (Report of the New York Barge Canal Terminal Commis¬ 
sion, 1911, Vol. I, pp. 77-78.) 

The railroad forwarding agencies, enumerated above, together with 
a few independent canal lines, are members of the New York Canal 
Forwarders’ Association. According to the report of the Commis¬ 
sioner of Corporations, the railroad agencies have also effected an 
association of their own known as the New York Canal and Lake 
Agents’ Association, and this organization, together with the Asso¬ 
ciation of Lake Lines (also dominated by the railroads) arranges and 
publishes the through rates via the canal as well as joint canal and 
lake rates. (Report of the Commissioner of Corporations, Dec. 23, 
1912, pp. 58-59.) 

(2) Having acquired all the through lake lines connecting 
Chicago and Duluth with Buffalo, and controlling the leading for¬ 
warding agencies on the canal, it was comparatively easy for the 
railroads to divert the canal traffic to their own rail or lake lines by 
refusing to exchange freight with the independent canal lines or 
forwarders, except upon payment of full local rates from Buffalo. 
As pointed out by the Commissioner of Corporations (Report of Dec. 
23, 1912, p. 59), “ the canal rate to Buffalo plus the rail rate, or the 
local lake rate, from Buffalo to the West makes the through rate so 
high; as compared with the through rate of railroads by their canal- 


STEAMSHIP COMPANY AFFILIATIONS ON THE GREAT LAKES. 327 


lake-and-rail lines to western points, that the independent forwarding 
agencies virtually have no chance to do business.” In other words, 
the independent canal lines were prevented from having any lake 
connections, and were thus forced to depend upon local canal busi¬ 
ness, which was relatively small. Relative to this practice the New 
York Barge Canal Terminal Commission reports that. 

Canal boats are greatly handicapped because of the lack of the through bills of 
lading so invariably used by the railroads and which, of themselves, so greatly 
facilitate shipments by the railroads. * ♦ ♦ Again, the railroads have 

always refused to either prorate or through rate with canal carriers but, 
on the contrary, have only been willing to receive freight brought to them by 
canal boats in the most unusual and expensive manner, such as by forcing them 
to discharge their freight at places other than the railroad wharves, and then 
team it to the railroad wharves, instead of allowing them to come direct to 
the railroad wharves and there discharge their freight. By refusing, on the 
other hand, to deliver freight to canal boats at their wharves, they have been 
able to prevent them from carrying large quantities of freight that would 
otherwise have been shipped by the canals (Report of 1911, p. 78.) 

(3) In connection with the foregoing factors should be 
mentioned the railroads’ policy of acquiring the terminal facilities at 
both Buffalo and New York, thus forcing the independent canal lines 
to even abandon most of their local business. The effect of this rail¬ 
road control of terminal facilities is explained at great length in the 
1911 report of the New York Barge Canal Terminal Commission 
and is regarded by the Commission as the greatest obstacle confront¬ 
ing transportation on the Erie Canal. Thus, as regards Buffalo, 
with reference principally to the eastbound trade, and especially 
grain which is the chief item of eastbound through traffic, the report 
states: 

The package freight business is wholly in the hands of the railroads, chiefly 
because of their terminal facilities, and because the canals have, hithereto, 
possessed no terminal facilities whatever. Until facilities of an entirely inde¬ 
pendent character are established at Buffalo for transshipments, it is unlikely 
that there will be any considerable increase in through freight traffic upon the 
canals, however they may be enlarged short of avoiding the breaking of bulk 
at that city. * ♦ ♦ In the case of grain, there are but three or four “ inde¬ 

pendent ” grain elevators. There being no wharves or other facilities at Buffalo 
reserved for the use of vessels bringing cargoes there from Lake ports that 
might be carried on the canals, these boats are practically forced to lie up at 
privately-owned—generally railroad-owned—wharves, thus facilitating the ship¬ 
ment of the freight by the railroads, since the latter refuse to afford any accom- 


328 STEAMSHIP COMPANY AFFILIATIONS ON THE GKEAT LAKES. 

modation at their wharves for canal boats attempting to obtain cargoes for 
eastern carriage, as well as denying to all canal boats other than those chartered 
by them access to their wharves for the shipment of freight brought west. 
(Report, 1911, pp. 77-78.) 

Again with reference to New York City the report states: 

There has never been any section of the improved water front in New York 
City, not even at the so-called canal basins, or canal districts, where there were 
any facilities, other than the unshedded wharves, for the accommodation of 
freight destined for shipment over the canals, or for freight received from the 
canals. There has, even at such open wharves, been no one to receive and care 
for any freight that might be received either for shipment over the canals, or 
that might be received at them by canal boats for local use. Lacking these 
essentials to the modern handling and carriage of freight it was inevitable that 
the through business should have almost vanished. (Report of 1911, p. 77.) 

The Effects of Railroad Control of Through Lake Lines and Canal For¬ 
warding Agencies. 

Aside from the elimination of independent carriers the effects of 
such control which have been most emphasized by witnesses before 
the committee are the increase in water rates on through package 
freight and the failure to improve the service. In the first place 
lake-and-rail and canal-and-lake rates have shown a marked advance 
under railroad control, while the all-rail rates between Chicago and 
New York have remained about constant for the past two decades. 
Because of the slower speed and the larger number of transfers inci¬ 
dent to water transportation, the lake-and-rail rates between Chicago 
and New York, for example, are lower than the all-rail rates between 
these points by an established difference, i. e., a differential which 
measures approximately the difference between the value of the 
water service and the rail service. The present differentials between 
the two services may be illustrated for the several classes of freight 
as follows: 

Westbound: 



Class 1. 

Class 2. 

Class S. 

Class 4. 

Class 5. 

Class 6. 

New York to Chicago: 

All-rail. 

75 

65 

50 

35 

30 

25 

Rail-and-lake. 

62 

54 

41 

30 

25 

21 

Differential. 

13 

11 

9 

5 

5 

4 




















STEAMSHIP COMPANY AFFILIATIONS ON THE GKEAT LAKES. 329 


Eastboiind: 



Class 1. 

Class 2. 

Class 3. 

Class 4- 

Class 5. 

Class 6. 

Chicae:o to New York: 

All-rail. 

75 

65 

50 

35 

30 

25 

Rail-and-lake. 

63 

55 

43 

30 

26 

21 

Differential. 

12 

10 

7 

5 

4 

4 


The above differentials are merely illustrative of the plan in 
general, various differentials having been adopted as between differ¬ 
ent routes and different cities. But what should be particularly 
noted is that the differentials between the all-rail and the lake-and- 
rail rates have in all cases been narrowed, thus causing an increase 
solely in the rates for the lake haul, since the all-rail rates have 
remained constant. While the standard lake-and-rail rates between 
New York and Chicago, for example, were— 


Class 1. 

Class 2. 

Class S. 

Class 4- 

Class 5. 

Class 6. 

54 

47 

37 

27 

23 

20 


prior to 1901, these were increased in 1901 from 54 to 59 cents on 
first-class freight, and other classes to correspond. In 1907 there 
was another advance to 62 cents on first-class freight, and other 
classes to correspond. Similarly canal-and-lake rates from New 
York to Chicago have also advanced since 1892, as follows: 



Class 1. 

Class 2. 

Class 3. 

Class 4. 

Class 5. 

Class f>. 

In 1892. 

30 

25 

20 

18 

16 

14 

At nrpRf^nt _............ 

42 

36 

29 

23 

21 

18 







These increases in the through water rates, while the all-rail rates 
have remained nominally constant, have, it was argued by the wit¬ 
nesses before the Committee, made the differential between the lake- 
and-rail and all-rail rates so small that the freight will move by rail. 
The inducement to use the water route, it is argued, is economy; and 
if the differential between the two rates just measures the disadvan¬ 
tages of the water route, the railroads will get the business, because, 
all things considered, the railroad service is preferred. Under such 
conditions, it is argued, the value of the water line as a regulator of 


















































330 STEAMSHIP COMPANY AFFILIATIONS ON THE GREAT LAKES. 

rail rates disappears. Mr. William M. Hopkins in his testimony 
emphasized the point that the reduction of the difference between the 
all-rail and the lake-and-rail first-class rate between 1901 and 1913 
from 21 to 13 cents, and correspondingly on other classes, has been 
brought about, not by a reduction of the all-rail rate, but by an ad¬ 
vance wholly on the lake transportation portion of the through rate. 
(Vol. 2, p. 1225.) 

Mr. Julius H. Barnes of Duluth emphasized the same point in his 
testimony, stating that whereas “ in 1890 the lake-and-rail rate on 
flour from Minneapolis to New York was 20 cents and the rail rate 
25 cents, and all flour moved lake-and-rail, they have since advanced 
the lake rate until the difference to-day is between 23 and 25, instead 
of 20 and 25, and that is just the dividing line where they are giving 
just enough to the Lakes to make a bluff at water transportation. If 
it was necessary, they would raise it to 24 as against 25, and they can 
do that, in my judgment.” (Vol. 2, p. 843.) 

To the foregoing it may be added, as already indicated, that the 
Lake lines have arrangements for through routing and division of 
rates with the railroad lines, as shown in tariffs filed with the Inter¬ 
state Commerce Commission, and the division received by the rail¬ 
roads for their haul east of Buffalo on traffic moving via the lake-and- 
rail route are substantially the same as the divisions they receive for 
the same haul on similar traffic moving via all-rail routes. Any 

changes in rates which any of the steamship companies may have to 

» 

make are apparently made known to the other water carriers. The 
Western Transit Co. (controlled by the New York Central) reported 
to the Committee that they have no understanding or working ar¬ 
rangement with any of the other lines, except that “the Company 
generally notifies the following Lake lines (Baltimore & Ohio Lake 
Line, Canada Atlantic Transit Co., Cleveland & Buffalo Transit Co., 
Detroit & Cleveland Navigation Co., Erie Eailroad Transit Line, 
Erie & Western Transportation Co., Lackawanna Transportation Co., 
Lehigh Valley Transportation Co., Mutual Transit Co., Port Huron 
& Duluth Steamship Co., and Kutland Transit Co.) of changes in its 
rates, and receives similar notification from them.” 

Not only has freight destined to the East been diverted from the 
Lakes through the narrowing of the differential between the lake- 
and-rail and all-rail rates, but the railroads have had no incentive 


STEAMSHIP COMPANY AFFILIATIONS ON THE GREAT LAKES. 331 

to improve their water-line service, their policy in this respect being 
entirely different from that pursued by the bulk carriers. Mr. 
Barnes testified that— 

the package freight lines are loading and unloading merchandise on the Lakes 
the same to-day as they did 40 years ago. Absolutely nothing has been done 
in the way of installing mechanical devices to cheapen the transshipping of 
package freight. It has been to the interest of the railroads to maintain the 
old-fashioned gangway style of steamers, in which freight must be taken on 
and off over the side of the boat on trucks. The small derrick arranged for 
some classes of freight, such as flour and mill stuffs, which would lift the freight 
directly from the cargo hold out on the docks, would cheapen the transshipping 
charge, but as long as it originates on the railroads and is controlled by them, 
it is in their power to say to whom they will give it and they will not share 
it with any individual carrier that might offer. (Vol. 2, pp. 841-842.) 

Leading American Lake lines Not Owned By Eailroads. 

Exclusive of ferry companies and strictly passenger lines, a con¬ 
siderable number of American lines engaging in the general freight 
business are not owned by railroads. The following table enumerates 
the 17 leading freight lines of this character, representing a total of 
70 vessels with a combined tonnage of 100,557 gross tons. Most of 
these lines, it will be observed from the data in the table, are com¬ 
paratively small and none engage in the through traffic from Western 
terminal centers, like Chicago and Duluth, to Buffalo. Moreover, of 
these 17 lines, 5 (Cleveland & Buffalo Transit Co., Detroit & Cleve¬ 
land Navigation Co., Goodrich Transit Co., Graham & Morton Trans¬ 
portation Co., and Northern Michigan Transportation Co.) operate 
nearly one-half of the vessels and control nearly 65 per cent of the 
total tonnage indicated above; while the 10 largest lines (including 
in addition to the aforementioned 5, the Chicago and South Haven 
Steamship Co., Crosby Transportation Co., Pere Marquette Line 
Steamers, Port Huron & Duluth Steamship Co., and the White Star 
Line) control nearly 80 per cent of the vessels with an aggregate of 
89,594 gross tons, or 89 per cent of the total. 


332 STEAMSHIP COMPANY AFFILIATIONS ON THE GREAT LAKES. 


LEADING AMERICAN LAKE LINES NOT OWNED BY RAILROAD 

COMPANIES/ 



Number 

Total 


Name of line. 

of 

gross 

Route between — 

vessels. 

tonnage. 



Relations with other 
earners through agree¬ 
ments, stock ownership. 


Arnold Transit Co. 


Ashley <&: Dustin 
Steamer Line. 


Benton Transit Co. 

Cleveland & Buf¬ 
falo Transit Co. 


Chicago, Racine & 
Milwaukee Line. 


Crosby Transp. Co. 


5 


2 


2 

4 


4 


1,700 (1) Green Bay and 

Sault Ste. Marie, 
calling at points in 
the Straits of Mack¬ 
inac. 

(2) Cheboygan and 
Sault Ste. Marie, 
calling at Mackinac 
Island. 

(3) St. Ignace and 
Lakeside, Mich., 
calling at Mackinac 
Island and small 
points en route. 

1,714 Detroit, Put-in-Bay, 
and Sandusky. 


715 Chicago and Benton 
Harbor. 

7, 753 Cleveland, Erie, and 
Buffalo, 


2, 767 


Chicago, Racine, and 
Milwaukee and re¬ 
turn. 


5,147 


Milwaukee to Muske¬ 
gon via Grand Ha¬ 
ven. 


Company reports no 
competition from wa¬ 
ter carriers to ports 
served directly but 
considerable terri¬ 
torial competition 
from other water car¬ 
riers. 


Company states that on 
freight traffic from 
Cleveland to Erie 
and Buffalo no com¬ 
petition from water 
carriers is encoun¬ 
tered. In the oppo¬ 
site direction com¬ 
pany comes in com¬ 
petition with the 
Erie & Western 
Transportation Co. 
The company owns 
a half interest with 
the Detroit & Cleve¬ 
land Navigation Co. 
in the Cleveland & 
Toledo line, operat¬ 
ing between Cleve¬ 
land and Put-in-Bay, 
Ohio. 

Northern M i c h i g an 
Transp. Co. owns 
$99,600 of company’s 
capital stock o f 
$ 100 , 000 . 


‘ Ferry companies and strictly passenger lines are not included In the above lists. 


















STEAMSHIP COMPANY AFFILIATIONS ON THE GREAT LAKES. 333 

LEADING AMERICAN LAKE LINES NOT OWNED BY RAILROAD 

COMPANIES—Continued. 


Name of line. 

Number 

of 

vessels. 

Total 

gross 

tonnage. 

Route between — 

Relations with other 
carriers through agree¬ 
ments, stock ownership. 

Chicago & South 
Haven S. S. Co. 

3 

4, 211 

Chicago and South 
Haven. 

Company reports that 
it encounters no com¬ 
petition from other 
water carriers as re¬ 
gards its direct 
ports but has terri¬ 
torial competition 
from other carriers. 

Detroit & Cleve¬ 
land Navigation 
Co. 

10 

26, 010 

(1) Detroit and Buf¬ 
falo. 

(2) Detroit and Cleve¬ 
land. 

(3) Toledo, Detroit, 
Port Huron, Harbor 
Beach, Alpena, 
Cheboygan, Macki¬ 
nac Island, and St. 
Ignace. 

(4) Cleveland, Put-in- 
Bay, and Toledo. 

The company owns a 
half interest with 
the Cleveland Navi¬ 
gation Co. in the 
Cleveland & Toledo 
Line, which it oper¬ 
ates. 

Escanaba & Glad¬ 
stone Transp. Co. 

1 

398 

Escanaba and Garden 
Bay, stopping at 
various small inter¬ 
mediate ports. 

Company reports no 
competition from 
other water carriers. 

Graham & Morton 
Transp. Co. 

6 

9,849 

(1) Chicago and Hol¬ 
land. 

(2) Chicago, St. Jo¬ 
seph, and Benton 
Harbor. 

Company reports no 
competition from 
other water carriers 
between Chicago and 
Holland. Between 
Chicago and Benton 
Harbor the line com¬ 
petes with the two 
small steamers of the 
Benton Transit Co. 

Goodrich Transit 
Co. 

10 

12, 677 

(1) Chicago, Grand 
Haven, Muskegon, 
and White Lake. 

(2) Chicago, Racine, 
and Milwaukee. 

(3) Chicago, Racine, 
Milwaukee, S h e - 
boygan, Manitowoc, 
Georgian Bay, and 
numerous other 
northern points,and 
return. 

Company reports that 
it encounters no 
competition from 
other water carriers. 

Hill Steamboat 
Line. 

1 

340 

Kenosha to Chicago, 
calling at Wauke¬ 
gan. 

Indiana Transp.Co. 

2 

3, 329 

Michigan City and 
Chicago. 

Company reports no 
competition on 
freight from other 
water carriers. 















334 STEAMSHIP COMPANY AFFILIATIONS ON THE GREAT LAKES. 


LEADING AMERICAN LAKE LINES NOT OWNED BY RAILROAD 

COMPANIES—Continued. 


Name of line. 

Number 

of 

vessels. 

Total 

gross 

tonnage. 

■ Route between — 

Relations with other 
carriers through agree¬ 
ments, stock ownership. 

Northern Michi¬ 
gan Transp. Co. 

4 

8, 648 

(1) Chicago, Luding- 
ton , Manistee, 
Frankfort, Petos- 
key, Mackinac Is¬ 
land, and Sault Ste. 
Marie. 

(2) Chicago, F r ank- 
fort, Glen Haven, 
Petoskey, Macki¬ 
nac Island, and 
Sault Ste. Marie. 

(3) Chicago, Glen Ha¬ 
ven, Petoskey, St. 
Ignace, Mackinac 
Island, Collingwood, 
Parry Sound, Kil- 
lamey, and Sault 
Ste. Marie. 

Owns 99 per cent of the 
stock of the Chicago, 
Racine & Milwaukee 
Line. 

Port Huron & Du¬ 
luth S. S. Co. 

3 

6,171 

Port Huron, Sault Ste 
Marie, Portage, and 
Duluth. 

This company has a 
traffic agreement 
with the Pere Mar¬ 
quette R. R. Co., as 
described in thetext. 

Pere Marquette 
Line Steamers. 

5 

4,099 

(1) Milwaukee and 
Ludington. 

(2) Ludington, Manis¬ 
tee, Onekama, Ar¬ 
cadia, and Frank¬ 
fort. 

(3) Ludington and 
Pentwater. 

(4) Milwaukee, Lud¬ 
ington, and Pent- 
water, returning di¬ 
rect to Milwaukee. 


White Star Line... 

5 

5, 029 

Toledo and Port Hu¬ 
ron, via Detroit, 
calling at various 
small places en 
route. 

Company reports that 
the Duluth & Cleve¬ 
land Navigation Co. 
operates to the same 
points from Toledo, 
Ohio, to Port Huron, 
Mich., and makes 
the same rates. 


It should also be noted that of the aforementioned IT lines the 
Northern Michigan Transportation Co. owns 99 per cent of the cap¬ 
ital stock of the Chicago, Racine & Milwaukee Line; and the Detroit 
& Cleveland Navigation Co., and the Cleveland & Buffalo Transit 
Co. jointly own (each owning a half interest) the Cleveland & Toledo 
Line operating between Cleveland and Put-in-Bay, Ohio. The Pere 
Marquette liners have an agreement with the Pere Marquette Rail- 


















STEAMSHIP COMPANY AFFILIATIONS ON THE GKEAT LAKES, 335 

road Co., effective from April 1, 1908, for a period of five years and 
thereafter so long as the two parties may agree, whereby the railroad 
company grants the use of its docks and warehouse property at Mil¬ 
waukee and Ludington to the steamship line, “ it being understood 
that the Pere Marquette’s boats shall have preference at said docks at 
all times.” The steamship company agrees to maintain a stipulated 
service and to accept at Milwaukee all freight offered by shippers or 
by connecting railroads or boat lines, consigned to points on or 
reached via the Pere Marquette Lines; but shall not, “ accept for ship¬ 
ment via the Pere Marquette any carload lots of grain or grain prod¬ 
ucts, except for local points in Michigan, unless first requested to do 
so by the Pere Marquette Railroad.” The steamship company fur¬ 
thermore agrees to “ operate exclusively in connection with the Pere 
Marquette in respect to all freight destined on or reached via the Pere 
Marquette lines and agrees that it will not deliver to any other rail¬ 
road company any freight which can be handled by the Pere Mar¬ 
quette.” Similarly, the Pere Marquette Railroad shall deliver to the 
steamship line all westbound freight destined via Ludington to Mil¬ 
waukee or points beyond, except such freight as the Pere Marquette 
shall desire to handle by its own car ferries. 

An examination of the routes of trade served by the nonrailroad 
lines, as indicated in the table, also shows that a considerable num¬ 
ber have their particular routes entirely to themselves. Thus 5 of the 
17 lines reported to the Committee that they encounter no competition 
from other water carriers, and 2 additional lines reported that while 
no other water carriers compete with them as regards the ports 
served directly, they do encounter considerable territorial competi¬ 
tion from carriers serving other ports. A comparison of the rates 
charged by all the Lake lines, both railroad-owned and otherwise, was 
also made from the current printed or typewritten port-to-port rates 
furnished by the carriers to the committee with a view to comparing 
the rates charged by different lines serving the same ports. This com¬ 
parison was made for 147 routes (i. e,, a route between two cities) 
with the following results: As regards 102 routes only 1 water line 
served the trade; in 21 cases 2 or more lines operated on the same 
route and used the same rates; in 3 cases, 2 or more lines operated 
over the same route and had common rates on certain classes of 
freight and dissimilar rates on others; in 6 cases the 2 or more lines 


386 STEAMSHIP COMPANY AFEILIATIONS ON THE GKEAT LAKES. 

operating on the route charged different rates; while in 15 cases where 
2 or more lines served the same ports the current rates charged were 
not furnished to the Committee. 

Consolidations Among Bulk Carriers on the Great Lakes. 

Tendency toward improved type of steamers^ improved loading 
and unloading facilities^ and lower rates in the hulk traffic. —The 
situation as outlined for the movement of package freight does not 
apply in the case of bulk products such as grain, iron ore and coal, 
except that in the case of grain the rail carriers, as already pointed 
out, do exercise a large measure of control over the rates of water 
transportation by reason of their control of the terminal facilities 
and the connecting rail transportation beyond the Lakes. In the 
main this bulk freight is handled by so-called independent tramp 
steamers whose port-to-port rates are fixed without reference to 
rail transportation. As a result conditions in this field have shown 
a tendency decidedly favorable to the utilization of America’s lead¬ 
ing waterway as a chief means of transportation; in fact the entire 
development in the bulk traffic has been the exact opposite of the 
tendencies noted in connection with the movement of package freight 
by railroad-owned boat lines. This class of freight traffic has had 
the advantage not only of an improved type of steamer of large 
carrying capacity, but improved machinery has been installed at both 
ends of the trip for the expeditious handling of iron ore and coal at 
a cost of only a few cents a ton (Vol. 2, p. 844), thus greatly reducing 
the cost of loading and unloading and saving the boats much time. 

This lower cost of operation has been reflected in a marked decline 
in the scale of Lake rates on bulk commodities during the past 20 
years. Thus, according to the Monthly Summary of Commerce and 
Finance, the contract rate on iron ore from Escanaba to Ohio ports 
has declined from an average of $1 per ton in 1889 to 45 cents in 
1911; and from Ashland and other ports at the head of the Lakes 
from $1.25 to 60 cents. Fluctuations in rates have also shown a 
very noticeable decrease in the later years. The wheat rate from 
Chicago to Buffalo, according to the same authority, has declined 
during the same period from an average of 2.51 to 1.08 cents per 
bushel; while the rate from Duluth to Buffalo has declined from a 
minimum of 2 cents and a maximum of 8 cents to an average of 1.17 
cents. Average coal rates from Ohio ports to Duluth have declined 


STEAMSHIP COMPANY AFFILIATIONS ON THE GKEAT LAKES. 337 

from 43 cents a ton in 1892 to 32 cents in 1911. From the reports 
made to the Committee by nearly all the bulk carriers, it appears that 
in 1912 practically all companies charged the same rates, and that 
the prevailing rate on iron ore from the head of the Lakes to Erie 
ports was 50 cents; from Marquette to Erie 45 cents, and from 
Escanaba to Erie 35 cents; while the rate on coal from the lower 
Lakes to Lake Superior and Lake Michigan was reported by prac¬ 
tically all the companies as 30 cents. Despite these favorable rates, 
the dividends of bulk freight carrying companies for the past five 
years, as reported to the Committee by the companies, would indi¬ 
cate that their business is a profitable one. 

Tendency toward consolidations among hulk carriers. —Despite 
the favorable tendencies noted in the preceding section, it should be 
stated that there has been a marked tendency during recent years 
toward consolidations among bulk carriers transporting ore and grain 
eastbound, and coal w^estbound on the Lakes. The 8 largest of 
these consolidations deserve special mention, and the essential facts 
with reference to each, as reported to the Committee by the manage¬ 
ments of the companies involved are herewith presented: ^ 

(1) Pittsburg Steamship Go. —This company, a subsidiary 
of the United States Steel Corporation, and by far the largest ship¬ 
ping consolidation on the Great Lakes, represents a combination of 
fleets formerly operated by the Bessemer Steamship Co., the Minne¬ 
sota Steamship Co., the Pittsburg Steamship Co. (old), and the 
American Steamship Co. The company also bought vessels from the 
Mutual Transportation Co., the Menominee Transit Co., the Lake 
Superior Iron Co., the Ashtabula Steamship Co., the Weston Transit 
Co., and C. W. Elphicke, and also has an interest as creditor in the 
preferred stock, bonds and mortgage notes of the Detour Dock Co., 
Boutell Steel Barge Co., Port Huron & Duluth Steamship Co., and 
the Great Lakes Engineering Works. Its capital stock of $7,880,000 
is owned by the Carnegie Steel Co. (a subsidiary of the United States 
Steel Corporation) and the United States Steel Corporation in the 

iThe facts offered in this chapter are those presented to the Committee by the man¬ 
agements of the companies involved in their replies to the Schedule of Inquiries directed 
to them by the Committee in August, 1912. The answers to the inquiries were received 
during the last three months of 1912 and the first few months of 1913. Various changes 
have no doubt occurred since the receipt of the replies, and it should therefore be noted 
that the following pages consider only the facts as they existed at the time the returns 
were received. 

25655"— VOL 4—14-22 






338 STEAMSHIP COMPANY AFFILIATIONS ON THE GREAT LAKES. 

respective amounts of $7,658,300 and $221,700. The United States 
Steel Corporation also owns $8,500,000 of the company’s notes out 
of a total of $11,958,000 of notes and bonds outstanding. Its fleet 
of 103 vessels (with a gross tonnage of 465,786) represents over 17.6 
per cent of the total gross tonnage of American vessels on the Great 
Lakes, exclusive of the line tonnage, and is engaged almost exclu¬ 
sively in the transportation of ore and coal, having carried ore dur¬ 
ing 1911 to the extent of 14,320,930 gross tons (or nearly 45 per cent 
of the total ore carried), and coal to the extent of 1,636,845 net tons. 

(2) Gilchrist Transportation Go .—This company was incor¬ 
porated in 1897, and is reported to have absorbed in 1903 the Merida 
Steamship Co., Globe Steamship Co., Steel Steamship Co., Lake 
Shore Transit Co., Tyrone Transit Co., Vega Transit Co., Lorain 
Steamship Co., and the Inland Star Transit Co. In its replies to 
the Committee’s Schedule, the company reports the ownership and 
operation of 44 vessels with a gross tonnage of 154,630, or over 5.8 
per cent of the total gross tonnage of American vessels on the Great 
Lakes, exclusive of the line tonnage. The company is the second 
largest ore carrier on the Lakes, but also transports considerable 
quantities of coal, grain, stone and pig iron. In January, 1910, the 
company was placed in the hands of a receiver, and according to 
the press, in the latter part of April, 1913, and subsequent to the 
filing of the Company’s replies to the Committee, a new merger was 
formed when the stockholders of the Lackawanna Steamship Co. 
met and organized the Interlake Steamship Co. According to the 
press accounts, 39 freighters owned by the Mesaba Steamship Co., 
Lackawanna Steamship Co., Huron Barge Co., Provident Steamship 
Co., Acme Steamship Co., and the Standard Steamship Co., were 
combined with 17 vessels of the Gilchrist Co., whose vessels were sold 
and the company dissolved. The Interlake, Mesaba, Lackawanna, 
and LIuron Barge companies are under the management of Pickands, 
Mather & Co., one of the 8 consolidations here referred to; while the 
Provident Steamship Co. is managed by the Pittsburg Steam¬ 
ship Co. 

(3) G. A. Tomlinson is manager of the Duluth,Globe,Inter- 
Ocean, Mutual, Superior, Zenith, and Peavey Steamship Cos., with 
a combined total of 23 vessels of 125,228 gross tons, or 4.7 per cent 
of the gross American tonnage on the Great Lakes, exclusive of tl^e 


STEAMSHIP COMPANY AFFILIATIONS ON THE GREAT LAKES. 339 


line tonnage. The official personnel of all the companies is practi¬ 
cally the same, and the Dnliith and Superior Steamship Cos. own 
the stock of the Mutual Steamship Co. 

(4) H. S. Wilkinson is manager of the Great Lakes Steam¬ 
ship Co. and the Globe Navigation Co., together operating 27 vessels 
of 113,273 gross tons, or nearly 4.3 per cent of the gross tonnage of 
American vessels on the Great Lakes, exclusive of the line tonnage. 
The two companies have practically the same personnel as regards 
officers. The Great Lakes Steamship Co., following its incorporation 
in 1911, purchased the properties of the American Transit Co., L. C. 
Smith Transit Co., Standard Transportation Co., United States 
Transportation Co., and the Wilkinson Transportation Co. 

(5) M. A. Hanna & Co .—This company, according to the 
reports received from the several companies constituting the group, 
manages the Calumet Transportation Co., Cambria Steamship Co., 
Eastern Steamship Co., Franklin Transportation Co., La Belle 
Steamship Co., IVIahoning Steamship Co., Republic Transportation 
Co., Virginia Steamship Co., and the Republic Iron Co. The official 
personnel of these companies, and their directors and leading stock¬ 
holders, are practically the same, and are closely identified with 
M. A. Hanna & Co. The stock of the Cambria Co. is.owned jointly by 
the Carnegie Steel Co., the Cambria Steel Co., and the Republic Iron 
& Steel Co., and the stock of the Mahoning Co. is owned by the 
Cambria Steel Co. All the companies combined represent a total of 
23 vessels with a gross tonnage of 103,608, or nearly 3.9 per cent of 
the total gross tonnage for American vessels on the Great Lakes, ex¬ 
clusive of the line tonnage. 

(6) Hutchinson & Go. are managers of the Calumet Transit, 
Keller Transit, Ohio, Pioneer, Superior, Tonopah, Lakewood, and 
Inland Steamship Cos., representing a total of 18 vessels with a gross 
tonnage of 102,440, or over 3.8 per cent of the total American Great 
Lakes tonnage, after eliminating the line tonnage. The official per¬ 
sonnel of these companies is practically the same. 

(7) John Mitchell is manager of the Buffalo Steamship Co. 
and the Cleveland Steamship Co., with a combined total of 18 vessels 
of 85,813 gross tons, or over 3.2 per cent of the aforementioned total. 

(8) Pickands^ Mather & Co. are managers of the Huron 
'Barge Co. and the Interlake, Mesaba, Lackawanna, and Ashtabula 


840 STEAMSHIP COMPANY AFFILIATIONS ON THE GKEAT LAKES. > 

Steamship Cos., with a total of 18 vessels of 83,090 gross tons, or 
over 3.1 per cent of the aforementioned total. 

(9) Numerous other instances of common managements, 
and in nearly all cases closely interrelated to the 8 above-men¬ 
tioned groups, might be cited as illustrative of the movement toward 
consolidation among bulk carriers. Among other principal consoli¬ 
dations may be mentioned W. H. Becker, manager of the Columbia, 
Interstate, and Valley Steamship Cos., with a combined total of 11 
vessels of 63,503 gross tons; A. T. Kinney, manager of the Croxton, 
Kinney, Tecumseh, Acme, and Standard Steamship Cos., with a total 
of 11 vessels of 62,824 gross tons; Boland & Cornelius, managers of 
the American, Frontier, Lake, Pennsylvania, Rochester, Wyoming, 
Yale Transit, and York Transit Cos., with a total of 14 vessels 
of 60,482 gross tons; and the Cleveland Cliffs Iron Co., manager of 
the Grand Island and Hopkins Steamship Cos., and the Presque Isle 
Transportation Co. with a combined total of 13 vessels of 56,203 tons. 
In each of these groups of companies the official personnel was found 
to be practically the same. 

Mention should also be made of the Great Lakes Towing Co. which, 
although not engaged in the carrying of bulk freight, represents the 
leading towing interests at nearly all the principal Lake ports where 
ore and coal are shipped or received. Its officials and directors show 
a representation of most of the leading Lake interests. Its dominant 
position in the towing business has been stated by one leading author¬ 
ity in the following words: “As a result largely of methods used in 
wiping out competition this combination has been enabled to take 
advantage of conditions giving it dictatorial power. The Great 
Lakes Towing Co. controls exclusively the towing of all the Lake Erie 
ports of any importance and also that of Chicago, South Chicago, 
Gary, Duluth and the Soo. It is easy to see what this means to the 
ore and coal trade, which plays such a vital part in the water trans¬ 
portation of the Great Lakes region. Forming a link between the 
railroad terminals and the ore, grain, coal, and lumber carrying ves¬ 
sels, the importance of the combination is such that it affects prac¬ 
tically the entire shipping interest on the Great Lakes.” In June, 
1910, the Federal Government filed a petition in equity in the Circuit 
Court of the United States at Cleveland against this company, the 
Ihttsburg Steamship Co., and others, it being alleged, among other 


STEAMSHIP COMPANY AFFILIATIONS ON THE GKEAT LAKES. 341 

things, that the Great Lakes Towing Co. constituted a combination 
in restraint of trade and that the Pittsburg Steamship Co. and the 
personnel of its management “ acquired substantially a majority of 
the stock of the Great Lakes Towing Co., thereby in effect having 
control of both, and acting in concert and together with a common 
purpose and as parts of an unlawful combination.” Without pre¬ 
senting in detail the findings of the court, it may be stated that the 
suit resulted in the company and its affiliated towing concerns being 
declared to “ constitute a combination in restraint of trade and com¬ 
merce between the several states of the United States and between the 
United States and Canada, in violation of the Act of July 2, 1890, 
known as the Sherman Act.” 

EIGHT LEADING CONSOLIDATIONS OF BULK CARRIERS ON THE 

GREAT LAKES. 


Name. 

Number 
of vessels. 

Total gross 
tonnage 
represented. 

Proportion of tonnage 
to total American 
Great Lakes ton¬ 
nage {exclusive of 
line tonnage). 

Pittsburg Steamship Co. 

103 

465, 786 

Over 16.6 per cent. 

Gilchrist Transportation Co. 

44 

154,630 

Over 5.8 per cent. 

G. A. Tomlinson, manager. 

23 

125, 228 

Over 4.7 per cent. 

H. S. Wilkinson, manager. 

27 

113,273 

Nearlv 4.3 per cent. 

M. A. Hanna & Co., managers. 

23 

103, 608 

Nearly 3.9 per cent. 

Hutchinson & Co., managers. 

18 

102, 440 

Over 3.8 per cent 

John Mitchell, manager. 

18 

85, 813 

Over 3.2 per cent 

Pickands, Mather & Co., managers. 

18 

83, 090 

Over 3.1 per cent. 

Total. 

274 

1, 233, 868 

Nearly 46 per cent. 


Afiliations among the leading consolidations of hulk carriers and 
between such consolidations and other groups of hulk carriers. —An 
examination of (1) the personnel of the managements and leading 
stockholding interests of the various constituent companies forming 
the several consolidations, and (2) the charter relations between 
the several groups, would seem to indicate that the leading consoli¬ 
dations of bulk carriers are themselves closely interrelated. As 
already stated, a large number of vessels of the Gilchrist Transporta¬ 
tion Co., upon the dissolution of the company, were acquired by 
companies under the management of Pickands, Mather & Co. More¬ 
over, the Chairman of the Board of Directorii of the Great Lakes 
Towing Co. acted as one of the joint receivers of the Gilchrist Co. 




















342 STEAMSHIP COMPANY AFFILIATIONS ON THE GREAT I^KES. 

A detailed examination of the names of officers, directors and leading 
stockholders of the various companies constituting the consolidations 
(as indicated in detail in the chart accompanying this chapter) 
shows so many cases of interlocking interests among the several 
groups as to justify the conclusion that the eight largest consolida¬ 
tions of bulk carriers on the Great Lakes represent a community of 
interest. It should also be noted that the Pittsburg Steamship Co., 
by far the leading bulk carrier, has extensive charter relations with 
the other seven groups. During the seasons of 1911 and 1912 this 
company had wild charters with the other groups for the carriage 
of over 3,000,000 tons of ore; while during 1912 vessels with a total 
of 53,000 gross tons were also leased under contract from these 
groups. 

PITTSBURG STEAMSHIP CO.’S CHARTER RELATIONS WITH THE 

FOLLOWING GROUPS. 

[As reported to the Committee in answer to its inquiries.] 


Charter relations nith — 

Wild charters 
during the sea¬ 
sons of 1911 and 
1912 {tons of ore 
carried). 

Gross tonnage of 
vessels leased 
under contract 
during 1912. 

Receivers of Gilchrist Transportation Co. 

Pickands, Mather & Co. 

G. A. Tomlinson, manager. 

H. S. Wilkinson, manager. 

John Mitchell, manager. 

C. L. Hutchinson & Co., managers. 

M. A. Hanna & Co. 

220, 276 
537,056 
739, 351 
825, 034 
486, 398 
247, 995 
58, 735 

10,000 
7, 500 
13,000 
12,000 
7, 500 
3, 000 

Total. 


3,114, 845 

53,000 



The above-mentioned 8 groups of bulk carriers, themselves closely 
affiliated, are in turn closely interrelated with a large number of 
other companies, firms and managements representing bulk carriers 
engaged in the ore, coal and grain carrying business. With a view 
to ascertaining the relations that exist between the various companies 
and firms operating bulk carriers on the Great Lakes, the Committee 
directed a Schedule of Inquiries to each, calling for a sworn state¬ 
ment of the officers and directors, the 10 largest stockholders, the 
names of all corporations, firms or individual carriers acquired in 
any way since organization, the ownership of securities in other 
navigation companies, the names of all corporations and firms 



















/^FFILIRTED BULK CARRIERS 

Operdiing on the 

GREAT LAKES 




H. L. 3HAW, M&R. (4 vessels of 17,131 tone) 

Mgr. of Lake Transit Co. & Mlllnokett S.S.Co. The officers of these com¬ 
panies are the same. 

yp, D & S of Hilinokett S.S.Co. is VP. D & S of Great Lakes Towing Go. 

2 S of Lako Transit Co. are respectively 3 & Secy, and D & Pres, of Buf- 
falo & Cleveland Cos. 


D & Secy, of Lake Transit Co. & Secy, of Ifiilinokett S.S.Co. is Secy, of 

several of the Tomlinson Cos. V?, C & 3 of Milinokett S.S.Co. is VP, D 
d S of Tomlinson Cos. 


JA1.1E3 BAVIDSCK, (11 vessels of 22,855 tons) 
VP of Great Lakes Towing Co. _ 




X' 


A 


I I 


r 


r 




\ 


C 



M. A. HANNA A CO. , MGR. (22 vessels o 
Mgr. of Calumet Transp.. Cambria. 
Mahoning. Republic Transp., Virgin 
official personnel of these companies 
ers, are practically the same, and are 
A Co. The stock of the Cambria Co. 

Steel Co., Cambria Steel Co. and Repul 
of the Mahoning Co. is owned by the Ci 

f 103,608 tons^ 

Eastern. Franklin Transp.. La Belle, 
ia, and Republic Iron Cos. The 

, and their directors and stockhold- 
closely identified v/ith M.A.Hanna 
is jointly owned by the Carnegie 
blio Iron A Steel Co., and the stock 

S of Virginia Co. is D, Seoy. A S 
of Grt. Lakes A St.L.Transp. Co. 

S of Caoibria S.S.Co- is D of Great 

Lakes Towing Go. 

S of Virginia Go. is D of Cleveland 

Cliffs Co. 

Vessels chartered to Pittsburgh S.S.Co 

S of Virginia Co. is D of Peavey Co. 

3 of Cambria, Eastern A La Belle Cos. 
is VP A D of Brown S.S.Co. 

3 of Virginia 04. is D of Calumet 

Transit A Tonopah Cos. 

S of Eastern, LaBelle, is S of Calumet 
Transit, Pioneer, Superior A Tonopah 

Coe. D of Interiake Co- is DS of 
Tonopah Co. 

Charter numerous vessels from John 
Mitchell. 

iV/IStn Transit Co- carries -for fd. A . 

Q/) ^ Co- 

MP of M.A.Hanna A Co. is VP, D A S of Hanna Transit A S of Miller S.S.Co. 

MR of Hanna A Co. is D A S of Kanna A Miller Cos. 2 members of firm of 

Hanna A Co. are S of Hanna Transit Co. 2 S of Franklin Transp. Go. are 

E in Hanna A MLllcr Cos. S of Eastern Co. Is E A S of Hanna A Miller Cos. 

Mgr. for all Hanna Cos. is 3 of Kinne; 
Cos. is Pres. A D of Aome A Standard 

7 S.S. Co. S of Eastern A LaBelle 

3.3. Cos-) Proi-fh * Co carry -for *■ Co 

Charter from Henry Steinbrenner. 


GREAT LAKES TOWING GO. (Vessels totalline 10,717 tons) 

James Davidson. VP Great Lakes Tov/ina: Co. _ 

D of Grt. Lakes Tov>lne Go. is 3 of Cambria S.S.Co. ____ 

Pres, of Huron Barge, Interiake, Meaaha & Lackawanna Cos. is B of Great Lakes 

Towing Co. _ 

S of Miller Co. is D of Great Lakes Towing Co._ 

Pres, d Treas. of Cleveland Cliffs Iron Co. is S of Great Lakes Towing Co. 

2 Bs of Grand Island Go. are D & 3 and E, respectively, of Grt. Lakes Tow- 
Ing Co. ___ 

'E of Great Lakes Towing Co. is D. V? & S of I sland Transit Co. 

MF of D.Sullivan d Co. is E of Great Lakes Towing Co. 

S of Alva S.S.Co. is VP of Great Lakes Towintt Co. 

Lawrence Transn. Co. is E & VP of Grt. Lalces Towing Go. 


■ .. aacArri.iranap* up* is oc vr or urt * Lalces Towln/r G 

t>roat Lakes Towing Co., was fonnerly Pres. & Gen. Man. of 
^Pittsburgh S^S.^Oe & rerr o senta latter on Chicago Boar d of Trade- 

Onfiir»nQ>* r\-C 1) < o #^v^A LLAr*IZTZ s ^ t.. a. .. . ■ fc i ^ 


r'hairman of E is one of t wo .joint receivers for Gilchrist Transp. Co- 

James Davidson, VP of Towing Co. is VP, E & 3 of th e Tomlinson Cos. 

-1^1 ^ ^^ttes Towing Co .__ls VP. E 4 S of Milinokett Go. 

—-T T & Sta n^rd Cos, is E 4 VP of Great I^es Towin;> no. 

D & 3 of Great Lakes Towing Co. is S of Tononnh Go 

E & S of Great Lakes Tow ing Go ' - 

Oo. is S of Kanna Co. 




is 3 of Hanna Oo. & 3 of Great Lakes Towing 




PICKARDS, MATHER & CO., MGR. (18 vessels of 83,090 tons) 

Mgr* of Huron Barge Co., Interiake S.S.Co., Mesaba S.S.Co., Lackawanna 
S.S.Co. and Ashtabula S.S.Co. The .managements of these cos. are closely 
inter-related. _ 

Pres, of Huron Barge, Interiake, Mesaba & Lackawanna Cos. is E of Great 
Lakes Towing Co. 


ft A Secy, of Pittsburgh S.S.Cio. is D or Huron Barge, interiake & Lacka- 

wanna Cos. Pres., D & S of Pittsburgh S.S.Co. is E of Huron Barge. 
Interiake & Lackawanna Cos. Charter ves sels to Pittsburgh S.S.Co. 


D of Huron Barge, Interiake & Lackawanna Cos. is E, Secy. & S of Prov- 
Ident 3.S.CQ. _ _ 

Charters from Wilson Transit Co. | Charters from Wisconsin Transit Co. 


D of Huron. Interiake. & Lackawanna Cos, is D. Secy. 4 S of Peavev S.S.Co. 


E of Huron Barge, Interiake & Lackawanna Cos. is E of Caliamet Transit A 

Tonopah Cos. 


E of Huron Barge, Interiake & Lackawanna Cos. Is D & Secy, of Standard 
-S_.3.Co._2 Dtof Interiake Co. are resnecfivelv DAS. & 3 of Standard S.S.Co 


Charter from H. Steinbreaner. 


2 Da of Grt. Lakes & St. L.Transp.Co. are D«of Interiake Co. D,Secy. & 

3 of Grt. L. 4 3t.L.Transp.Co. is E of the Huron Barge, Interiake & Lack- 
wanna Cos. D & 3 of Chicago Nav. Go. & Gartland Co. is E of Lackawanna 
Co. D 4 S of Chicago Nav. Co. is D of Lackawanna Qp. 


Pres. A S.of Cleveland Cliffs Iron Co. is-D of Huron Barge & Interiake 

Cos. EDs of Cleveland Cliffs Co. are Dsof Huron Barge & Interiake Cos. 
E of Cleveland Cliffs Co. is E of Lackawanna Co. E of Mesaba Go. is E 
of Grand Island Co. 


/■Chartered numerous vessels from John Mitchell. 


/ 


PITTSBURGH S.S.CO. (103 vessels of 462, 786 toils. ) 

Mgr. of Provident S. 3. Co. 

Bought vessels from the Bessemer, American, Minnesota, Mutual Transp., Me¬ 
nominee Transit, Lake Superior Iron, Ashtabula.A Weston Transit Cos. and 
C.W.Elphloke. All of the stock of the Pittsburgh S.S.Co. is owned by or 
for beneficial interest of Carnegie Steel Co. A U.S. Steel Corporation, A 
Pittsburgh S.S.Co. owns stock of Boutell Steel Barge Co. and Mortgage notes 
of Port Huron A Duluth S.S. Co. and Great lakes Engineering Works. 

A.B.Wolvin, former Pres. A Gen. Kan. of Pittsburgh S.S.Co. arid represent- 

' ative of same on Chicago Board of Trade, is D of Great Lakes Towing Go. 

_ D A Secy, of Pittsburgh S.S.Co. is D of Huron Barge, Interiake A Lackawanna 
■ Cos. D in latter three cos. is D. Pros. A S in Pittsburgh S.S.Co. 

- D of Cleveland Cliffs Iron Co. is D A Seev. of Pittsburgh S.S.Co. 

- .P A- Seev. of Pittsburgh S.S.Co. is D A Secy, of Grt. Lakes A St.L.Tranflr^. fio 

Pittsburgh S.S.Co. charters vessels fr 

below: 

. M.A.Hanna A Co. 

ora the companies A- individuals named 

Chicago A Duluth Transn. Co. 

' W.B.Davock A Shenango S.S. Co. 

G.A. Tomlinsfin 

f Charter contract with Alva S.S.Co. 

Gilchrist Transp. Co. 

/ Brown A Co. 

Hutchinson A Co. 

. D.Sullivan A Co. 

H.K.Oakes 

/ Wilson Transit Co. 

Plckands. Mather A Co. 

Acme S.S.Co. 

W.G.Richardson A Co. 

, John Mitchell 

H. A G.M. Steinbrenner 

R.A.Williams A North American S.S.Co. 

Great Lakes S.S.Co. 

Boland A Cornelius 

Henry Wineman. Jr. 


J.A.Francorabe A Capitol Trannn.Co. 

Wisconsin Transit Co. 








CHICAGO A DULUTH TRANSPORTATION CO. (3 vessels of 8.557 tons) 


Chartered vessels of Pittsburgh S.S.Co. Pittsburgh S.S. Co. fumiished car¬ 

go under an operating contract. 

PROVIDENT STEAMSHIP CO. ( 3 vessels, the tonnage of which has been includ- 

1-2. 9f Interiake A Lackawanna Cos. is E. Seev. & s of ProvldAnt - 


of Detroit Ci 


GILCHRIST TRANSPORTATION CO. (44 vessels of 154,630 tons) 

Owns 23/24ths of Stock of Lorain S.S.Co. 

Charters vessels to Pittsburgh S.S.Co. 


One of the joint receivers of Gilchrist Transp. Co. is chairman of D of 

Great Lakes Towing Co. 



1 Charters vessels to the Pittaburg2;s^-^^^^ 


J. A. FRANCOMBE, MGR. (2 vessels of 2,167 tons) 

Capito l Transn . Co. & Hone Transn . Co. 
J^A.Francombe and the Capitol Transp. Co. charter vessels to 


Pittsburgh Gi^p 


/ 


JOHN MITCHELL, MGR. (18 vessels of 85,813 tons) 

Mgr. Buffalo S.S.Co. and Cleveland S.S.CO. 

Chartered numerous vessels to Plckands. Mather A Co. 

Chartered numerous vessels to M.A. Hanna A Co. 

D A 3 of Grt. Lakes A St.L.Transp.Co. is Mgr. of Buffalo S.S.Co. ADA 

Pres. A Mgr. of Cleveland S.S.Co. 

D of Acme Transit Co. is D of Buffalo S.S. Co. 

D of Australia Trsinslt Co. is D of Buffalo S.S. Go. 

D A S of Alva S.S.Co. is D of Buffalo S.S.Co. 

Charter to Pittsburgh S.S.Co. 

E A Secy, of Buffalo S.S. Co. is S of Lake Transit Co. E A Pres, of 

Cleveland S.S.Co. is 3 of Lake Transit Go. 

D A Secy, of Buffalo S.S. Co is S of Peavey S.S.Co. E A Pres, of Cleve¬ 

land Co. Is S of Peavev S.S.Co. 

3 of Calumet Transit Co. is D A Pres, of Cleveland Co. A D.ASecy. of Buf¬ 
falo Go. 

D of Buffalo S.S.Co. is E of Argo S.S. Co. 

D of Buffalo Co. is ITTof Grt. LeKea Steamsh• pCaA DA S of Globe Nav.Go. 

D Of Erie A Carter Cos. Is D, Secy. A Mgr. of Buffalo Co. A D, Pres. A 

Mrr. of ClevelandC*. 




BROWN A CO., MGRS. (4 vessels of 20,332 tonsi 

Mgra. of Brown, Douglass. Empire and Miller S.S, Cos, These companies 
ir^ve the same management and stockholders. 

S of Cambria. Eastern A LaBelle Cos. is VP A D of Brown S.S.Co. 

E A S of Alva Co, is S of Brown Co. 

D of Chicago Nav.Co. is S of Miller S.S.Co. 

V? A E of Shenango S.S.Co. is Pres. A D of Brown S.S.Co. 

D of Acme Transit Co. is S of Brown S.S.Co. 

S of Miller S.S.Co. is E of Great J-akes Towing Co. 

Brown A Co. charter vessels to Pittsburgh S.S.Co. 

Prf>3. A E of Brown S.S.Co. is E A S of Calumet Transit Go. 

Yf of Franklin A Fremont Cos. is S of Miller S.S.Co. 

Pres. A E of Northwest Transp. Co. is Pres. A E of Brown S.S.Co. 

D of Australia Transit Co. is S of Brovm S.S.Co. 




CLEVELME CLIFFS IRON CO., MGR. (13 vessels of 56,203 tons) 

Met. of Grand Island S.S. Go.. Hopkins S.S.Co., and Presque Isle Transp. 

Co. The officers of the Cleveland Cliffs Co. are officers of these three 
cos. ami the peraonnel of all the cos. ia practically the seme. The stock 
nf Grand Island Co. io owned by the Cleveland Cliffs Go. 

Pres. A S of Cleveland Cliffs Co. is D of Huron Barge ^ Interiake Cos. 

Cleveland Cliffs, Huron Barge A interiake-Cos. have 2 Dsin common. E cf 

Cleveland Cliffs Co. is D of Lackawanna Go. D of Mesaba Co. is D of 

Grand Island Co. 

D of Cleveland Cliffs Co. is S of Virginia Co. 

Wilson Transit Co. carries principally for three companies, of v/hich the 
Cleveland Cliffs Co. is one. 

Brown A Co- carry principally for three cos. of which the Cleveland Cliffs 

Co. iP ona» ^ 

Pres. A Treas. of Cleveland Cliffe Co. is S of Great Lakes Towing Co. 

2 Ds of Grand Island Co. are D and DAS respectively of Great Lakes Tow- / 

inp Go. 

D of Cleveland Cliffs Co. is D A Sec. of Pittsburgh S.S.Co. ^ 

2 Es of Cleveland Cliffs Co. are respectively E, Secy. A S and S of Peavey ^ 

S.S.Co. D of Hopkins S.S.Co. is S of Peavey S.S.Co. 

D of Cleveland Cliffs Co. is D of Calumet Transit Co. D of Cleveland ^ 

Cliffs Co. is S of Tonopah S.S.Co. 

Secy, of Cleveland Cliffs Co. is D A S of Hanna A Miller Transit Cos. 

E.of Cleveland Cliffs Co. is Secy. A E of ^me A Standard S.S. Cos. — 

K. Steinbrenner charters vessels to Cleveland Cliffs CO. E of Hopkins Co. 

is E of Nioholaa A Minch Transit Cos. E of Grand Island Co. is S of ^ 

Minch A Nicholas Transit Cos. 

Pres, of Interstate Co. is Treas. of Presque Isle Transp. Co., and the 2 

cos. have one D ooznmon. N 

D, Secy. A S of Grt. Lakes A St .L.Transp.Co. is D of Cleveland Cliffs Co. 

E of Grt. Lakes A St .L.Transp.Co. Is S of Cleveland Cliffs Co. 

Pres. A D of Northern Lakes Co. is D of Hopkins Co. D, Secy. A Treas. of 
Northern Lakes Co. is D of Hooklns Co- 


laiAHE TRANSIT CU. (1 vessel Of 6.260 tonal 


S Of Island Traneit Co. la S ofrArgo S.S.Co, 


\ 


D of Great Lakes Tewing Go. is D. VP A 3 of Island Transit Co. 




W.A. i A.H. HAWGOOE, UGRS. (6 vessels of 38,966 tons) 

Mgrs. of Aome Transit Co. and Hawgopd & Avery Transit Co. Stock of the 
Acme Transit Co. is owned by Hawgood & Avery Transit Co., and the personnel 
of both companies is oloeely identified wit>i ■fcy.fl m^Tiaaing finn. 


D of Acme Transit Is 3»of Brown Co. 


D of Acme Transit Co. la E of Buffalo Co. 


E A S of Alva Co. is D of Aome •Transit Co. 

E of Acme Transit Co. la D of Australia Transit Co. 

E & Treas of H.&A. Transit Co. is E of Keller Transit Co. E & VP of H.& 

A . Transit Co. is S of Keller Transit Co. E & Treas. of Aome Transit Co. 
is E of Keller Go. B of Acme Co. is S of Keller Co. VP of Acme Co. is 
J> I Pres, of (»ilo & Superior Cos. & E of Pioneer & Tonopah Cos. 


VP of Acme Co. is S of Hanna & Miller Transit Cos. 

A S of Norton & Rlohardson Cos. 


E of Aome Co. is E 


E of Acme Co. is E of Argo Co. 


Y? of Acme Co. is Pres, of Jenkins S.S.Co. 


D. SULLIVAN A CO., MGRS. (14 vessels of 39,701 tons) 

Mars, of Chicago Nav. Co.. Great Lakes A St. Lawrence Transo- Co.. 
CLrlatQPLsr S.S.Co.. Detroit S.S.Co.. Gartland S.S.Co., and the Chicago 
S.S»0Ok. (managed by Wta. Anderson) is closely related to this group. 

The managements of all the above-named companies are closely inteiwrrelat— 
ed. Mgr. of Chicago S.S.Co. is S of Gartland Co. 

- D of Chicago Nav. Co. is S of Miller S.S.Co. 

D A S of Grt. L. A St .L.Transp.Co. id D of Interiake Co. Secy., DAS 
of Grt. L.ASt.L.Transp.Co. is D of Huron Barge, Interiake A Laokawanna Cos. 
Eds of Chicago Nav. Co. A Gartland Co. is D of Laokawanna Co. E A S of 
Chicago Nav. Co. is D of Laokawanna Go. 

5 of Virginia Co. la D. Secy. A S of Grt.L.ASt.L.Tranto.Co. 

D A S of Grt.L.A St.L.Co. is D, Seoy. A Manager of Buffalo Go. ADA Pres. 

of Cleveland Co. 

E A S of Grt.L.ASt.L.Co. is VP of Northern Lakes Co. 

MF of E. Sullivan A Co. is D of Grt. Lakes lowing Co. D of Grt.LLlSt.L. 

Co. is D of Great lakes Towing Co. 

iin Se<y. 4 .St. Lawyewce C«.t»l>.t5».y.Pittsburgh S.S.Co. 

3 of Provident Co. is D A S of Chicago Nav. A Gartland Cos. A S of Detroit 

E A Seoy. of, Provident Co. ia D A Seoy. of Grt.L.ASt.L.Tranen. Co. 

iwll.van -4 Co. charter ves«e)s P*t'tab4<r4»i S.S.Co. " j 

IVP of Franklin A Fremont Cos. is D of Chicago Nav. Co. -f- 

^_3ecy. A 3 of Peavey Co. is D. Seoy. A 3 of Grt.L.ASt.L.Transo. Co. / 

Secy. A S_gf Gt. L.ASt .L.Transp.Co. is D of Calumet A S of 'Tonopah r.na. f 

D, Secy. A S of Grt .L.ASt .L.Transp.Co. is D of Cleveland Cliffs Co. A D 
of Grt. L.ASt.L.Transp.Co. is 3 of Cleveland Cliffs Go. 

^ Nav. Co. is S of Standard Co. DAS of Grt. L. A St.L. Co. 

15 S of Standard Co. D. Seoy. A S is oommon to Grt. L.ASt.L., Acme A 

Standard Cos. VP A E of Acme A Standard Cos. is E A S of Grt. L. A St. L. ^ 
Transp. Co. S of Aome & Standard Cos. is D A S of Chicago Nav. A Gartland 
Co*. A S of Detroit Co. 



W. B. EAVOCK, MGR. (5 vessels of 39,804 tons) 

Mgr. Shenango S.3 . Co. and Sh^dango S.S. A Transp . Co., both of which 
are owned by the Shenango Furnace Co. 


Bresm A Co. carry principally for three groups, of v*ilch the Davook Cos, 
form one. 


VP A E of Shenango S.S.Co. is Pres. & E of Brown Co. 


VP. D & S of Shenaiago S.S.Co. IS E & 3 of Calumet Transit Co. 


E, Secy. & Treas. of Northwest Transp. Co. is E & 3 Of Shenango S.S.Co. 
Pres. A B of Northwest Transp. Co. Is VP & E of Shenango 3.S. Co. 


V. h. Eavook A Shenango 3.S. Co. charter vessels to Pittsburgh S.S. Go. 

An arrangement was made whereby these comi>anies were to carry for 
the Caniegie Coal Co. of Pittsburgh, and the Carnegie Fuel Co. of 
Duluth. 


1VIL30N TRANSIT CO. 9 vessels of 45.816 tons 

Carries for four groups, principally of which Clevelrnd Cliffs is one 

Plckands, Mather A Co. is one of the principal groups 
carries. 

for which Wilson Go. 

Carries for M.A. Hanna A Co. 


Carries for Tonowanda Iron A Steel Co. 


Charters vessels to Pittsburgh S.S. Co. 




CORRIGAN. MC KINNEY A CO., MGRS. (6 vessels of 27,66 

Mgrs. of Australia Transit Co. and Northern Lakes S 

^ tone) 

* s• Co* 

E A S of Grt. L. A St.L. Transo. Co. is VP of Northern 

Lakes Co. 

E Of Acme Transit Co. is D of Australia Transit Go. 



v_ 


D Of Australia Transit Co. is E of Alva Co. 
Lakes Co. are E A S and S of Alva Co. 


DAS and S of Northern 


D of Australia Transit Co. is E of Buffalo Co. 


E of Australia Transit Co. is S of Brown S.S. Co. 


Pres. A D of Northern Lakes Co. is E of Hoi^kins Co. 
of Northern Lakes Co. is D of Hopkins Co. 


D, Seoy. A Treas. 


Pres. A E of Northern Lakes Co. is Asst. Seoy. of Peavey Go. 


D A Secy, of Australia Transit Co. Is D of Argo Go. 


Charter vessels from H. Steinbrenner 


D A Secy, of Australia Transit Go. is E of Pioneer Co. 


g Es of Australia Transit Co. are Ds of Norton Transit Co. 


Pres, of Northern Lakes Go. is D, A Asst. Secy, of Acme A Standard Cos. 
VP of Northern Lakes Co. la E A VP of Aome A Standard Cos. 


2 S of Northern Lakes Co. are D A S of American Co. 3 DsA S of North¬ 

ern Lakes are Ds, respectively, of American, Rochester A Wyoming Cos. 

2 Da of Northern Lakes Co. are D A S of Pennsylvania A York Transit Cos. 

D Of Australia Transit Gq. Ip E of Carter S.S. Co. 


K. A. WILLIAMS, MGR. (6 vessels of 29,276 tons) 

Mgr. of North American and Commonwealth S. S. Cos. 


3 of North American Go. Is D A S of Calumet, Pioneer, Superior Cos, A 
D of Tonopah Co. 

R. A. Williams and North American Co. charter vessels to Pittsburgh Co. 


E A S of North Aaerloan Co. is Secy, of Miller Co. 



/ 

L, C, WALDO* MGR, ( 5 vessels of 14,882 tons) 

Mgr. of ^ega. Northwest A Roby Transp. Cos. 

D A Pres, of Northwest Transp. Co. is E A Pres, of 

E. D. CARTER, MGR. ( 4 vessels of 20,068 tons) 

Mgr. of Carter and Erie S. S. Cos. The management of 
these 2 oos. is practically the same* 


D of Erie A Carter Cos. is D, Secy. A Mgr, of Buffalo Co. 

A E A Pres, of Cleveland Co. 

A VP of Shenango S. s. Co, D, Secy A Treas, of North¬ 
west Transp, Co. is D A S of Shenanco s. s. Co. 

E of Carter Co. is E A S of Richardson Co. 


D, Secy. A Treas, of Northwest Transp. Co. are S of 

Calumet Transit Co. Pres. A E of Northwest Co. 

le D A S of Calumet Transit Co. 

E Of Australia Transit Go. is D of Carter Co. 

E of Carter Co. is D of Argo Co. 


G. A. TOMLINSON, MGR. (23 vessels of 125,228 tons) 

S.S.CO., inter^ocean S.S.Co.,-Mutual S.S.Co 
5el of^Il lihesa* S.S.Co., Peavey, S.S.Co. The offi^IiT^erson- 

- the Duluth A 

Tomlinson charters vessel s to the Pittsburgh S.S.Col 


Secy, of Tanlinson Cos. is D A Seoy. of Lake Transit Co. A Secy, of Mil- 

Inokett S.S.Co. VP,E«»S <vf/hilrngn-et^tCg. y/p, p.«S af Ta^’hhson Cos. 


E of Peavey Co. la 3 of Virginia Gn. 


James Eavidson. D. VP A 3 on the Tomlinson Cos, is VP of Great Lakes Co. 

E of Hur on Barge. Interiake A Laokawanna Cos, is E. Seoy. A S of Peavey Co. 

S of Peavey Co. la D A 3eoj. of Buffalo Co. A E A Pres, of Cle veland Co. 

S T\ <5 AM,.* o O -..ff n __ ,-t_ _-rv' . . '1 _. . _ . _ ■" _ 


S and D, Secy. A S of Peavey Co. are Ds In Cleveland Cliffs Co. S of 

Peavey Co. is E of Hopkins Co 


Seoy. A S of Peavey S.S.Co. is D« Secy. A S of Srt. Lakes A St.L. Co» 


Pres, A D of Northern Lakes Co. is Asst. Secy, of Peavev Co. 

S of Peavev Co. is D of Kinney & Tecumseh Coa. 


Pres.. DAS Jackson Co. la S of Zenith Co. 

S of Peavev Co. is D of certain of the Hutohlnson Cos. 


YP of Calinnet Transit Co. is MF of G.A.Tomlinson A Co. 


K 


Hutchinson a co., mgrs. (le vessels of 102,440 tons! 

Mgr. of Calumet Transit. Keller Transit. Ohio. Pioneer. Superior, 
Tonopah. Lakewood . A Inland Steamship Cos. The official persomiel of 
these companies Is practically the same. 


Charters vessels to the Pittsburg S.S.Co. 


D A 3 of Grt. Lakes Towing Co. is S of Tnnonn.h Gn. 


Vff/cens s^ne- I 3 of Virginia Co. is D of Cal- 

umet Transit A Tonopah Cos. S of Plastem A LaBelle Cos. is S of Calumet 
Transit. Pioneer. Superior A Tonopah Coe. 


D of Tonopah Co. is D of Huron Barge. Interiake A Lackawanna Cos. 


S of Caliunet Transit is Pres. A D of Clevalaad Co, ADA Secy. 
S of Cleveland Co. is S of Calumet Transit A E of Ohio Co. 


of Buffalo Co 


Pres. A D of Brovm Co. is D A S of Calumet Transit Co. 


D of Cleveland Cliffs Co. is D of <?aiptr»et Oo. A S of Tonopah Co. 
Cleveland Cliffs Co. 


is D of 


E A Trees, of Hawgood A Avery Transit Co. is E of Keller Transit Co. E A 
VP of H, A A. Transit Co, is S of Keller Co. D A Treaa. of Aome Transit Co. 
is D of Keller Co. D of Acme Transit Co. is S of Keller Co. VP of Aome 
Transit Is Prea. A D of Ohio A Superior Cos. A D of Pioneer A Tonopah Cos. 


D, Secy. A S of Grt. Lakes A St.L.Transp.Co. is D of Caluinet A S of Tono- 

Cos. 


YP. D A S nf Shenango S.S.Co Is D A S of Calumet Transit Co. 

S of N. American Co. is DA:S of Calumet, Superior A Pioneer Cos. A D of 

Tonopah Co. 


1) A Seoy. of Australia Transit Co. is D of Pioneer Co. ^- 

D A S of Valley Go. is E A S of Calumet Transit, Pioneer A Superior Cos. 

A D of Tonopah Go. U of valley Co. is S of Plonesr Oo, 


VP of Calumet Transit Co is MF of G.A.Tomlinson A Co. 

of peavey Go. is D of certain of the Hutchinson Cos. 


Pres, Acme Co. is D A S of Calumet Transit, Pioneer, Superior A Tonopah Cos. 

D of Calnraet Transit, Pioneer, Superior & Tonopah is D of Croxton, JeiUtins, 
A Kiniaey Cos, Prea. A D of Jenkins Is D of Tonopah Co. Pres. A D of 
Ohio A Superior Cos, is YP A D of Pioneer S.S.Co. k ^ -f Ca.)ytvre-t. 

D A S of Argo Co. is S Of Superior Co. 


S of Hann a A Mille r Cos, is D A 3 of Ohio. Pioneer. Superior A Tono pah Cos.K 




(9 vessels of 35,234 tons) 

son Trans it. Uliler_Itm3it, 
iuDDau'uSJ: 


W.C.RICHARISON A CO., MGRS. 

Mgrs. of Ifyina Tr^slt. 

It, Rlohardson Transportation, iiv-- 

ardsm. The management of these coa. is practically the same. 




C. Richardson charters vessels to Pittabui^h 3.S. Co. 


D A S of Great Lakes Toirlng Co. is 3 of Hanna Transit Co. 

Towing Co. la S of Hanna Transit Co. 


S of Great Lakes 


MF of M.A. Hanna A Co. is VP, D A S of Hanna Co. A S of Killer Co. 2 MFs of 

M.A. Hanna A Co, are S of Hanna Co. 2 § of Franklin Transp. Co. are D of 
Hanna A Miller Cos. MF of M.A. Hanna A Co. is D A S of Hanna A Miller Cos. 
3 of Eastern Co. is D A S of Hanna A Miller Cos. 


Secy, of Cleveland Cliffs Co. la D A S of Hanna A Miller Cos. 


VP of Acme Co. is S of Hanna A Miller Cos. 
Horton A Rlohardson Cos. 


E of Aome Co. is E A S Of 


A S of North American Co. is Seoy. of Miller Co. 


A 3 of Alva Co. la E A S of Norton A Richardson Cos. 


D of Carter Co. is D A S of Richardson Co. 


Da of Australia Transit Go. are Ds of Norton Transit Co. 


S of Hanna A Miller Cos, is Pres. A E of Jenkins Co. 


S of Hanna A Miller Cos, is D A 3 of Ohio, Pioneer. Superior A Tonopah Cos, 

prea.. E A S of Jackson Go. is S of Zenith Co. 


of Miller Co. is S of Kinsman Go. 


of Miller Co. is 3 of Rochester Co. 


2 Es of Argo Co. are E A S of Norton A Richardson Cos. 


ARGO STEAMSHIP CO. (3 vessels of 2,649 tons) 

2 Da of Argo Co. are D A S of Norton A Richardson Co3( 


A S of Argo Co. is S of Superior Co. 


of Argo Co. is D of Buffalo Co. 


of Island Transit Co. is S of Argo S.S. Co. 


\ 


of Acme Transit Co. is D of Argo Go. 


D A Secy, of Australia Transit Co. is D of Argo Co. 


D A S of Alva Co. is D of Argo Co. 


D of Garter Co. is D of Argo Co. 


WISCONSIN TRANSIT CO. (3 vessels of 10,789 tons] 
Charters vessels to Pittsbut^h S.S. Co. 


Charters vessels to Piokands. Mather A Co. 


Jg^res. 


A S of Wisconsin Transit Co. is S of North Amerioan Co. 


Charters vessels to W. H. Beoker 


A. T. KINNET, MGR. (H vessels of 62,824 tons) 

Mgr. of Croxton. Kinney A Teoumseb S.S. Cos. and formerly of Jenkins 
S.S. Co, also. The personnel of all these companies is practically the 
aame. Mgr. Aome A Standard S.S. Coa. Iclosely affiliated with the above cos.) 


E of Croxton, Jenklus A Kinney Cos. is D of Calumet Transit, Pioneer, Super¬ 

ior A Tonopah Cos. Pres. A D of Jenkins Co. is D of Tonopah Co, D A YP of 
Pioneer Co. and D A Pres, of Ohio A Superior Cos. Pres, of Acme Co. is 
DAS of Calumet. Pioneer. Superior A Tonopah Cos. 


__ '* A __ 

Pres. A D of Jenkins Co. is S of H^nn A Miller Cos. 


of Teoumseh A Kinney Cos. Is S of Peavey Co. 


Acme Co. charters vessels to Pittsburgh S.S. Co. 


D A VP of Acme A Standard Cos, is D A VP of Great Lakes Towing Co. _ 

Mgr. of all the Hanna Cos. is 3 of Kinney Co. S of Eastern A LaBelle Cos. 
is Pres. A D of Aame A Standard Coa. 


D of Huron Barge, Interiake A Lackawanna Cos, is D A Secy, of Standard Co. 

2 Da of Interiake Co. are reBpeotively DA S A S of Standard Co. 


of Cleveland Cliffe Co. is D A Secy, of Acme A Standard Cos. 


YP of Acme Transit Co. is-Pres, of Jenkins Co. 


S of Chicago Nav. Co. is S of Standard Co. D A S of Grt. L.ASt.L.Transp. 
Co. is S of Standard Co. D, Seoy. A S of Grt.‘L.ASt.L. Co. is D, Secy. A 

S of Acme A Standard Cos. VP A D of Acme A Standard Cos. la D A S of Grt. 

L. A St.L. Co. S of Acme A Standard Cos. is D A S of of Chicago Nav. Co. 
A Gartland Co. A S of Detroit Co. 


of Valley Co. is D of Jenkins Co. d & a if yalley co. Ib Treaa. of Standard Co. 


S of North Amerioan Co. is S of Kinney Co. 

Pres, of Northern Lhkes Co. is E&Asst. Seoy. of Acme A Standard Coe. 

of Northern Lakes Co. ia D A VP of Acme A standard Coa. 


VP 


HERBERT K. OAKES, MGR. (5 vessels of 30,553 tons) 

Mgr. of Fra^nkiin . Fremont A Commonwealti S.S. Cos. These cos. have the 
same manag^snt and directors. All of thj stock of the Fremont Co. is owned 
by the Franklin Co. 


Charters vessels to the Pittaburfdi*S.S. Cc. 


VP of Franklin A Franont Cos, ia S of Millsr Co. 


VP of Franklin A Fremont Cos, ia E of Chicago Nav. Co. 


GEO. M. A H. STEINBRENNER, MGRS, (6 vessels of 26,671 tons) 

Mgrs. of Minoh. Nicholas A Kinsman Transit Cos. The managements of 

these three companies are closely inter-related. ___ 

G.M. A H. Steinbrenner charter vessels to the Pittsburfjb S.S. Co. 


-- --- T"-■- -i,r 

H. Steinbrenner charters vessels to Piokaals. Mather A Co. 

H. Steinbrenner charters vessels to M. A. Hanna A Co. 


H. Steinbrenner charters vessels to Cleveland Cliffs Co. D of Hopkins Co. 

ia D of Nicholas A Minch Cos. D of Grand Island Co. is 3 of Miaoh A Nioh- 
olas Coa. 


H. Steinbrenner charters vessels to Corrigan. McKinney A Co. 


3 of Kinsman Co. is S of Miller Transit Go. 


of Kinsman Co. is S of Rochester COj 


H. S. WILKINSON, MGR. (27 vessels of 113,273 tons) 

Mgr. of Great Lakes S.S. Co. and Globe Navigation Co. These two com- 
panles have the same Pres. A practicalln the aame management. 


Great Lakes S.3. Co. charters vessels to Pittsburg^ S.S. Co. 


of Buffalo Co. is D A S of Grt. Lakes A Globe Cos. 


BOLAND A CORNELIUS, MGRS. (14 vessels Of 60,482 tons) 

Mgrs. of American . Frontier . Lake . Pennsylvania, Rochester, Wyoming , 
Yale Transit and York Transit Cos. The managements of these oompan- 
ies are practically the same. 


of Rochester Cp. is S of Kinsman Co. 


of Rochester Co. is S of Miller Co. 


Boland A Oomelius charter vessels to the Pittsburgh S.S Co. 


2 3 of Northern Lakes S.S. Co. are D & S of American S.S. Co. 2 Ds of the 

Northern Lakes Co. are Ds of American, Rochester, A Wyoming S.S. Cos. 2 Ds 
of th,e Northern Lakes Co. are D A S of the Pennsylvania S.S. Co. A York Transit 
Co., respectively. 


WM. M. MILLS, MGR. (5 vessels of 34,433 tons) 

Mgr. of Frontier S.S . Co., Niagara Transit Go., Tonawanda Transit Co., 
and E A Treas. of Toiaa ganda Iron.Ai-Stg.el ^o. 


(7 vessels of 9.4^3 tons) 


Wilson Transit Co. carries prlnoipally fo|* TonaT^anda Iron A Steel Co. 


M. A. BRADLEY, MGR. ( 6 vessels of 13,626 tons) 
Mgr, of Alva S. S, Co, 


D of Australia Transit Co, is D of Alva Co, 
Jakes Co, are E A 3 and-3 of Alva Co, 


DAS and S of Northern 


E & 3. of Alva Co, is E of Acme TranBjt Co. 


D A S of Alva Co, is S of Brovm S, S, Co. 


J? A S of Alva Co. ia E of Buffalo Co. 


S of Alva Co. is VP of Great Lakes Towing Co, 


M, A. Bradley has charter contract with Pittsburgh S, S, Co, 


P A S of Alva Co, is E A S of Norton A Rlohardson Cos, 

P A 3 of Alva Co, is E of Apgp Co, 


BROWN A CO. (1 vessel of 2,070 tons) 

Carries principally for M. A. Hanna A Co,, Cleveland Cliffs Iron Co., 
and the Shenango Furnace Co, 


WM, H, BECKER, MGR, ( H vessels Of 63,503 tons) 

Mgr, of Columbia. Interstate A Valley S. S. Cos. Practically all 
■ ^Inters tate Co, Is owned by Jones A LaughIin 


- - — — -by Jones A Laughli 

res. of Interstate Co, is Treas, of Presque Isle Go, D of Interstate 

Cp. is D of Presque Isle Go. _ 

^ * S of Calumet, Pioneer, A Superior Cos. A D of 

Joaopah Co. D Of Vallev fl o. j, p pf Pioneer Co. 

Transit Co, char ters vessels to W, H. Becker. 


D of Valley Co. is D of Jenkins Co. 

Standard Go. 


E A S of Valley Co, is Treas, of 


- explanation - 

■iUck’holdcrt iKdujtgd by bhcL //«<« 

PycA. ' 

y/ee Pyey/den t 
<^»cyet^rv 
Tyeiti;rcy 
■^1 rector 

<^>’e of /o /ir^est s ttc/rdo/den . 

Methtey of F,r}„ 

i 



S of North American Co. is S of Kinney Co. 

Fi-es. A D of Acme A Standard! Co. 


S of North American Co. is 


3 of Mor'.h American Qo. ia D. Pres. A S Of Wisconsin Transit Co. 



House Ooc. No. 805 ; 63d Cong., 2d Sess. 













































































































































































































































































































































































































































































































































































































































































































































































































































































































































4 




' ^ 

















































STEAMSHIP COMPANY AFFILIATIONS ON THE GREAT LAKES. 343 

owning securities of the company, all charter and traffic arrange¬ 
ments with other companies, etc. (For a copy of the inquiries di¬ 
rected to the carriers see p. 10 of this volume.) While a considerable 
number of the managements declined altogether to furnish the in¬ 
formation, or answered the same imperfectly, the Committee suc¬ 
ceeded in obtaining full information from 85 per cent of the total 
number, and those failing to answer were, in almost every case, com¬ 
paratively unimportant carriers. 

A summary of the intercorporate and other relations existing be¬ 
tween various groups of carriers, as revealed by the answers re¬ 
ceived in reply to the Committee’s Schedule of Inquiries, are repre¬ 
sented on the accompanying chart. Before summariz.ing the results 
of these answers, a few words of explanation may be necessary to 
a proper understanding of the information presented. The chart 
has been so arranged as to represent 37 distinct groups of carriers 
(each group relating to a distinct ownership of vessels by a com¬ 
pany, firm or individual, or representing a combination of companies 
by common ownership or management), these 37 groups comprising 
105 companies, firms or managements, operating 453 vessels. Each 
group has been assigned a separate panel in the chart, which for 
the sake of convenience we will call a ‘‘ group panel,” and within 
each panel there is a statement of (1) the total gross tonnage of 
the vessels comprising the group, (2) the names of the various com¬ 
panies (each being underlined) belonging to the group because of 
a common ownership or management, and (3) an enumeration of the 
facts which tend to show an interrelation between the group as a 
whole, or any of the companies or firms forming the same, and 
another group or any of its constituent companies or firms. The 
facts referred to, as showing the interrelationship between the sev¬ 
eral gi’oups, pertain to the existence, between any two or more 
groups, of common officers, directors, stockholders (selected in every 
instance from among the 10 largest stockholders), members of firms, 
and managers, as well as charter and other agreements. Any of 
the above relationships between any two groups are separately stated 
in the “ group panels ” of each of the groups concerned and are con¬ 
nected by a line, the black lines representing connections through 
common officers, directors, stockholders or managers, and the red 
lines referring to affiliations by charter or other agreements. (For 


344 STEAMSHIP COMPANY AFFILIATIONS ON THE GREAT LAKES. 

an explanation of the designations used see explanatory remarks ” 
on the lower right-hand corner of the chart.) 

A detailed examination of the aforementioned chart will show the 
interrelations between the 8 leading groups of bulk carriers, already 
discussed, and the 29 other gi'oups of lesser importance, to be so 
numerous and intimate as to warrant the conclusion that the entire 
list of 37 groups, comprising 105 companies, firms and managements, 
represents a vast community of interest, which, if found necessary, 
could easily be dominated by the leading interests therein as regards 
rates and business policy. This conclusion seems especially war¬ 
ranted when it is borne in mind that the Pittsburgh Steamship Co. 
alone represents a gross tonnage equal to over 23 per cent of the 
entire tonnage accredited to all of the 37 groups; and that the 8 
leading groups, including the Pittsburg Steamship Co. and all 
closely affiliated, represent an aggregate of 1,233,868 gross tons, or 
over 63 per cent of the grand total for the 37 groups. Mr. Julius 
H. Barnes, Chairman of the Traffic Commission of the Duluth Cham¬ 
ber of Commerce, testified before the Committee (vol. 2, pp. 853-854) 
that while “ there is a place for the independent boat to live on the 
Lakes ” he had no doubt whatever “ that the big ore and coal ship¬ 
pers could obliterate the independent carrier on the Lakes if they 
showed that disposition,” but that in his opinion the big carriers have 
never shown that disposition but instead have always fixed a rate 
which would allow an independent boat to live because the portion 
of the total traffic controlled by the independents “ is so relatively 
small as to have been of no particular interest to them.” He further 
amplified his statement by explaining that “ The coal rate is fixed 
absolutely by coal companies, and the ore rate by the ore companies ” 
but that the grain rates are open, in view of the large number of 
individual shippers. He also confirmed his belief in the oft-repeated 
assertion that the United States Steel Corporation (and its affiliated 
companies) dictates the rate on ore because it is by far the biggest 
shipper and could simply state what it would pay to independent 
carriers. In fact, the general opinion of those familiar with condi¬ 
tions existing in the transportation of ore and coal is to the effect 
that the United States Steel Corporation has ascertained what con¬ 
stitutes a fair return on the money invested in the large ore boats 
and that they have pursued a policy of dealing fairly with outside 


STEAMSHIP COMPANY AFFILIATIONS ON THE GREAT LAKES. 345 

vessel owners, generally establishing a rate wliich will allow them to 
make a good profit on their investment. The impression is general 
that outside coal and ore vessel owners are at the mercy of the United 
States Steel Corporation, partly because no other concerns have suffi¬ 
cient tonnage to keep their vessels occupied, and also because there 
is nothing to prevent the Pittsburg Steamship Co., controlled by 
the United States Steel Corporation, and by far the dominant car¬ 
rier, from lowering its ore rates, since the steel corporation can make 
its profit in the manufacturing of steel products. It is because of the 
knowledge of these facts that the liberal attitude of the United States 
Steel Corporation in its dealings toward outside carriers has been 
generally commended by so-called independent operators. More¬ 
over, the United States Steel Corporation can exert influence upon 
outside operators of bulk carriers because of the large extent to 
which it favors them with charters for the carrying of its ore. Thus, 
according to its answers to the Committee’s Schedule of Inquiries, 
the Pittsburg Steamship Co. reports wild charters made during 
the seasons of 1911 and 1912, respectively, to the extent of 3,244,978 
and 1,754,704 tons of ore carried. These wild charters were made 
with 28 owners or agents in 1911, and 32 in 1912, and nearly all of 
them belonged to the 37 groups of owners or agents indicated on the 
chart already referred to. In addition to these wild charters the 
Pittsburg Steamship Co. also leased vessels under contract, during 
1912, to the extent of 75,000 tons from 17 of the 37 groups. 

The community of interest between the various bulk carriers is 
especially significant when viewed from the standpoint of the propor¬ 
tion that the tonnage of the 37 groups, as indicated on the chart, 
bears to the total tonnage on the Great Lakes. A compilation of the 
data furnished by the 1913 issue of the Great Lakes Register shows 
the total tonnage on the Great Lakes for 1912 to have been 2,939,933 
gross tons. Of this total the 144 vessels of the 27 steamship lines 
operating on the Lakes comprise 299,668 gross tons, leaving a total of 
2,640,265 gross tons for all other vessels. Of this last total (i. e. the 
total tonnage, exclusive of line tonnage) the 453 vessels of the 105 
companies and firms, constituting the 37 groups of bulk carriers with 
which the chart deals, represent 2,001,529 gross tons, or over three- 
fourths (75.7 per cent) of the total tonnage after eliminating the 
steamship lines. Much of the 2,640,265 tons, however, consists of 


346 STEAMSHIP COMPANY AFFILIATIONS ON THE GREAT LAKES. 


vessels which do not engage in the grain, ore and coal business, such 
as ferries, tugs, wrecking boats, fire-department boats, dredging boats, 
gravel boats, fishing craft, and carriers which engage strictly in the 
lumber, oil and passenger business. Exclusive of the 625 American 
bulk carriers on the Lakes of 1,000 tons and over, and the 144 line ves¬ 
sels, the 1913 issue of the Great Lakes Register reports 1,103 boats 
with an aggregate gross tonnage of 300,502 tons. If this last amount, 
together with the 299,668 gross tons of the line vessels, be deducted 
from the total tonnage of 2,939,933, it appears that the 37 groups of 
bulk carriers control 85.5 per cent of the total Great Lakes tonnage, 
exclusive of the 144 line vessels and all other vessels under 1,000 tons. 
Moreover, viewed from the standpoint of the size of the vessels, the 
predominating importance of the aforementioned 37 groups of bulk 
carriers becomes still more apparent as indicated by the following 
table. These 37 groups represent over 69 per cent of the Lake vessels 
with a gross tonnage of 1,000 or over; over 81 per cent of all vessels 
whose • tonnage exceeds 2,000; over 94 per cent of those exceeding 
3,000; over 96 per cent of those exceeding 4,000, 5,000, and 6,000 tons, 
' respectively; and all of the vessels with a tonnage of 7,000 tons or 
over. 

OWNERSHIP OF BULK CARRIERS WITH A TONNAGE OF 1,000 OR OVER. 


Tonnage. 

Total 

number of 
vessels. 

Number of 
vessels owned or 
controlled by the 
37 groups. 

Total 
tonnage 
of all the 
vessels. 

Tonnage of vessels 
owned or controlled 
by the 37 groups. 

1,000 tons or over.... 

625 

432 (69.1%) 

2, 339, 763 

1,939,988 (82.9%) 

2,000 tons or over.... 

473 

384 (81.1%) 

2, 111, 289 

1,862,339 (82.2%) 

3,000 tons or over.... 

341 

321 (94.1%) 

1, 802, 613 

1,712,517 (95.0%) 

4,000 tons or over.... 

275 

265 (96.3%) 

1, 569, 658 

1,512,162 (96.3%) 

5,000 tons or over.... 

166 

161 (96.3%) 

1, 067, 462 

1,053,005 (96.7%) 

6,000 tons or over.... 

125 

120 (96.0%) 

843, 239 

817,474 (96.2%) 

7,000 tons or over.... 

32 

32 (100.0%) 

238, 926 

238, 926 (100.0%) 













CHAPTER XIL 

STEAMSHIP COMPANY AFFILIATIONS ON THE PACIFIC COAST. 


The Pacific Coast Trade Proper. 

Important independent steamship lines make a more prominent 
showing in the Pacific Coast trade than in an}^ other division of our 
coastwise or inland commerce, and, aside from the companies engaged 
in the Alaskan and Hawaiian trades, no important consolidations 
of water carriers seem to exist. Unlike the situation in the Atlan¬ 
tic and Great Lakes trade, the railroads control only two impor¬ 
tant lines (excluding from consideration mere bay or river lines), 
viz, the Pacific Mail Steamship Co. and the San Francisco & Port¬ 
land Steamship Co. The remaining important lines engaging in 
the Pacific coast trade proper, judging from their answers to the 
Committee’s Schedule of Inquiries, are not railroad-owned, this 
number including three from San Francisco to Seattle, three to 
Portland, and four to San Pedro (Los Angeles) and San Diego. 

Enumeration and description of the lines .—Stated in tabular form, 
the eight important Pacific coast lines, and the leading ports between 
which they operate, are shown on page 348. 

An examination of the table shows that two of the eight lead¬ 
ing Pacific coast lines—American-Hawaiian Steamship Co. and 
Alaska Pacific Steamship Co.—connect only San Francisco with 
ports to the north; that three—Independent Steamship Co., Pacific 
Naviga:tion Co., and Pacific Mail Steamship Co.—connect only 
San Francisco with southern California ports; and that three— 
North Pacific Steamship Co., San Francisco & Portland Steam¬ 
ship Co., and Pacific Coast Steamship Co.—conduct a through serv¬ 
ice from southern ports of California via San Francisco to northern 
coast ports and return, the first two to Portland and Astoria and 
the last to Seattle. A fourth through service exists, the Alaska 
Pacific Steamship Co. (operating between San Francisco and Seat- 


347 



PACIFIC COAST LINES AND THE PORTS THEY SERVE. 


348 


STEAMSHIP COMPANY AFFILIATIONS ON THE PACIFIC COAST 




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STEAMSHIP COMPANY AFFILIATIONS ON THE PACIFIC COAST. 349 

tie) having entered into a traffic agreement with the Pacific Navi¬ 
gation Co. (operating between ports of southern California and San 
Francisco) whereby each company routes its traffic via the other. 

Relations between the lines^ and between the lines and railroads^ 
explained .—With the exception of the Alaska Pacific Steamship 
Co. and the Pacific Navigation Co., which as already stated have 
an agreement for the routing of traffic via each other’s steamers, 
none of the aforementioned lines, according to the answers to 
the Committee’s Schedule of Inquiries, is a party to any agree¬ 
ments or understandings with any of the other lines or a member 
of any associations, exchanges, or conferences which have in view 
the division of traffic or the fixing and maintenance of rates; The 
port-to-port rates charged by the lines appear in nearly all cases to 
be less than the all-rail rates, but the difference (ranging from 6 to 
10 cents per 100 pounds below the rail rates), according to the reports 
of the lines, is not a constant differential but varies at all times. 
Some of the lines (the Pacific Coast Steamship Co., Alaska Pacific 
Steamship Co., San Francisco & Portland Steamship Co., Inde¬ 
pendent Steamship Co., and North Pacific Steamship Co.) have 
through traffic arrangements with certain connecting railroad com¬ 
panies upon an agreed basis of divisions; ^ and all except the last 
line report that no railroads have refused to prorate with them. The 
North Pacific Steamship Co. states that: “the Harriman lines out 
of Portland have refused to prorate with the line; no reasons are 
given but as they own a line operating out of Portland covering the 
same territory as we do the reason is obvious.” The Pacific Naviga- 

1 The Pacific Coast Steamship Co. has a division of through rates with the Great 
Northern Ry., Northern Pacific Ry., Chicago, Milwaukee k Puget Sound Ry., Canadian 
Pacific Ry., Western Pacific Ry., Pacific Coast Ry., Southern Pacific Ry., and various 
other transportation lines. 

The Alaska Pacific Steamship Co. interchanges traffic with the Great Northern Ry., 
Northern Pacific Ry., and the Chicago, Milwaukee & Puget Sound Ry., receiving a pro¬ 
portion of the through rates named hy these railway companies. 

The North Pacific Steamship Co. has contracts with the Spokane, Portland & Seattle 
Ry. for the exchange of traffic at Portland, and with the Pacific Coast Ry. for the 
exchange of freight at San Luis, Cal. 

The San Francisco and Portland Steamship Co. has through traffic arrangements with 
the Oregon-Washington Railroad & Navigation Co. and its connections, and the Northern 
Pacific Ry. Co., providing for the interchange of freight between San Francisco and in¬ 
terior northwestern points upon an agreed basis of divisions. 

The Independent Steamship Co. has arrangements with the San Pedro, Los Angeles & 
Salt Lake R. R. Co. and the Las Vegas & Tonopah R. R. Co. on through business to and 
from San Francisco and Nevada points. 




350 STEAMSHIP COMPANY APFILIATIONS ON THE PACIFIC COAST. 

tion Co. reports that: ‘‘the Southern Pacific, Santa Fe and Western 
Pacific & Salt Lake Railroads have refused to put us in a position 
to participate in eastern passenger business, round trip or otherwise. 
Through their influence our application for membership in the Trans¬ 
continental Passenger Association has been denied.” The Pacific 
Navigation Co. has a contract with the San Pedro, Los Angeles & 
Salt Lake R. R. Co. whereby the railroad agrees to furnish certain 
wharves, the steamship company in turn agreeing to confine its sail¬ 
ings exclusively from and to said wharves, “ except if and when pre¬ 
vented by law from so doing.” It may be added that all of the capital 
stock and notes of the San Francisco & Portland Steamship Co. are 
owned by the Oregon-Washington Railroad & Navigation Co. which, 
in turn, is owned by the Oregon Short Line R. R. Co. (in turn con¬ 
trolled by the Union Pacific Railway System). The San Francisco 
& Portland Steamship Co. also advised the Committee that it is 
“ affiliated with the Pacific Mail Steamship Co. (having some offi¬ 
cials jointly), but that it has no agreement or understanding with 
either the Pacific Mail or the Oregon-Washington Railroad & Navi¬ 
gation Co. with respect to the division of traffic or the maintenance of 
rates.” 

A comparison of the printed or typewritten tariffs of port-to-port 
rates, as furnished by the several lines to the Committee, shows that 
they are alike; but there is ample evidence to warrant the conclusion 
that the lines cut rates frequently to meet competitive conditions. 
All of the lines refer to the severe competition in the trade, both from 
regular lines and from the more or less regular sailings of the Charles 
Nelson Co. and the Olson & Mahony Steamship Line. These latter 
companies operate between San Francisco and Puget Sound, their 
competition, however, being only northbound, since they operate their 
vessels for merchandise northbound and their own lumber cargo 
southbound. With a view to ballasting their vessels northbound so 
as to make time, these carriers will not hesitate to secure freight 
at any rate necessary. In respect to the competitive conditions 
prevailing in the trade, the following extracts from the replies to the 
Committee’s Schedule of Inquiries will serve to indicate the extent 
to which the lines cut their regular rates: 

The Alaska Pacific Steamship Co. reports; “In submitting our rates on 
local traffic we call your attention to the fact that this company, being in com¬ 
petition with other local lines and tramp steamers, is on various occasions 


STEAMSHIP COMPANY AFFILIATIONS ON THE PACIFIC COAST. 351 

called upon to meet competitive rates. This is done from time to time and such 
rates are protected through billing instructions issued to our agents by the 
traflic department of this company. We are not attaching copies of these 
special quotations in view of the fact that they fluctuate and are on various 
occasions quoted for the movement of the one shipment only,” 

The North Paciflc Steamship Co. reports: “Our rates are not published and 
change almost from day to day to meet competition and conditions. ... We 
can not answer the question as to whether our rates include all charges for 
marine insurance, dockage, wharfage, etc., because conditions change so fre¬ 
quently and on one trip of a steamer various shipments take various rates and 
conditions according to the agreements entered into with the shipper.” 

The San Francisco & Portland Steamship Co. reports: “ Our rates are in 
nearly all cases less than the all-rail rate. On commodities moving in small 
quantities the differential is generally 6 cents per hundred pounds, but on 
freight moving in large quantities the differential will range greater, but is- 
not fixed as our rates are made without consideration of the rail rates. . . . 

No changes have occurred during the last five years, except as they have 
occurred automatically by reason of the lowering or raising of our rates with 
respect to conditions of ocean competition.” 

The Trade between Puget Sound and Alaska. 

Enumeration of trade routes and steamship lines operating on each. 

All the regular lines connecting the American Pacific coast proper 
with Alaska operate from Seattle or Tacoma, all Alaskan freight 
destined to, or arriving from, ports farther south being trans¬ 
shipped at these points. This trade between Puget Sound and 
Alaskan ports is divided into four distinct routes, viz: 

1. The Nome Koute (the most northerly one and sometimes 
called the Kotzebue Bay, or Bering Sea Route), comprising the ports 
of St. Michael, Golovin, Bluff, Solomon, Nome, Teller, Deering, Kee- 
walik, and Kotzebue. All these ports are served by at least two and 
sometimes by all of the following lines: The Alaska Steamship Co., 
Western Alaska Steamship Co., and Pacific Coast Steamship Co, 
In answer to the Committee’s request “ for all port-to-port class and 
commodity rates now charged,” all the above-mentioned lines fur¬ 
nished tariffs, the rates of which, as regards the traffic between Seattle 
and Tacoma and the above-mentioned ports, were identical for all the 
lines with the exception of the rate on ore southbound. 

2. The Southwestern Alaska Route, comprising among the 
leading ports Yakutat, Kayak, Katalla, Cordova, Valdez, Seward, 
Seldovia, Port Graham, Iliamna and Kodiak. These ports are 


352 STEAMSHIP COMPANY AFFILIATIONS ON THE PACIFIC COAST. 

served by only two regular lines, namely, the Alaska Coast Co. and 
the Alaska Steamship Co. A comparison of the current rates be¬ 
tween Puget Sound and these ports and vice versa, as furnished to 
the Committee by the lines, shows them to be identical for about 
half of the ports. With reference to the remaining ports on this 
route the rates charged by the two lines are the same as regards about 
one-half of the commodities. 

3. The Southeastern Alaska Route, comprising the ports of 
Ketchikan, Wrangel, Petersburg, Douglass, Juneau, Haines, Skag- 
way and Seward. These ports are served by the following regular 
lines: The Alaska Steamship Co., the Pacific Coast Steamship Co., the 
Humboldt Steamship Co., and the Northland Steamship Co. Only 
the first three of these lines furnished the current rates charged in 
the traffic to and from Seattle and Tacoma. The tariffs furnished 
show that the Alaska Steamship Co. and the Pacific Coast Steamship 
Co. charge the same rates, but that the Humboldt Co. is apparently 
an independent line, since its rates, as furnished to the Committee, 
differ from the published rates of the other lines. 

4. The Yukon River Route, comprising many small towns 
on the Yukon River and its tributaries. Two main lines—the North¬ 
ern Navigation Co. and the Merchants’ Yukon Line—operate on this 
route, both stopping at the same places. The local rates of both 
companies are the same. Freight coming from Seattle and Tacoma 
to Yukon River points is brought to the mouth of the Yukon by 
either the Alaska Steamship Co. or the Pacific Coast Steamship 
Co. (whose through rates to Yukon River points are the same), and 
from there is carried by the Northern Navigation Co. or the Mer¬ 
chants’ Yukon Line, both of which quote the same rates on traffic 
exchanged with the aforementioned two lines on through business 
to and from Seattle and Tacoma. 

Steamship Consolidations in the Alashan Trade .—With the excep¬ 
tion of the Alaska Coast Co., the Northland Steamship Co., and the 
Humboldt Steamship Co. (the last two companies operating only 
one steamer each, of 697 and 1,075 gross tons respectively, on the 
Southeastern route), all of the above-mentioned lines operating to 
and from Seattle and Tacoma seem to be affiliated through stock 
ownership or traffic agreements. In the first place, $1,499,100 of the 
$1,500,000 of the capital stock of the Pacific Coast Steamship Co. is 
owned by the Pacific Coast Co., the latter company owning 14 


STEAMSHIP COMPANY AFFILIATIONS ON THE PACIFIC COAST. 353 

steamers of 34,683 gross tons and the former operating them. The 
Pacific Coast Co. (with outstanding common stock of $7,000,000^ 
first and second preferred stock of $1,525,000, and first-mortgage 
bonds of $5,000,000) controls through stock ownership numerous 
companies besides the Pacific Coast Steamship Co. Among the 
companies thus controlled should be mentioned the Juneau Steam¬ 
ship Co., whose entire capital stock is held half and half by the 
Pacific Coast Co. and the Alaska Steamship Co., and the Ketchi¬ 
kan Wharf Co., whose entire stock is also owned in equal shares by 
the same two companies. Two-thirds of the capital stock of the 
Western Alaska Steamship Co. (which owns no vessels but charters 
them from various parties, including the Alaska Steamship Co. and 
the Pacific Coast Steamship Co.) is also owned by the Alaska Steam¬ 
ship Co. and the Pacific Coast Steamship Co., each owning one-third 
of the $25,000 of capital stock outstanding. 

The Alaska Steamship Co. (with $3,000,000 of common stock out¬ 
standing. and representing a consolidation of the Alaska Steamship 
Co. and the Northwestern Steamship Co., Ltd.) owns and operates 
13 steamers of 28,319 gross tons, and, aside from the company’s 
interest in the Juneau Steamship Co. and the Ketchikan Wharf Co. 
(acquired in 1908), owns all of the stock of the Union Wharf Co. 
(owner of a wharf at Juneau). The Pacific Coast Steamship Co. 
reported to the Committee that it “has at times had arrangements 
or understandings with the Alaska Steamship Co. as to sailing dates 
between Puget Sound and Alaska with a view to avoiding sailings 
of different boats on the same date, but has now no such arrange¬ 
ments.” The Alaska Steamship Co. reported that it now “has no 
agreements or understanding with any other navigation companies, 
except that a practice exists of exchanging traffic with the Juneau 
Steamship Co. at Juneau, when such traffic is to or from points 
reached by that company and not by our own vessels.” All the other 
companies engaging in the Alaskan trade denied the existence of 
any agreements or understandings with other navigation companies; 
yet the foregoing facts clearly indicate that the three lines operat¬ 
ing on the Nome or Bering Sea Koute—the Alaska Steamship, 
Western Alaska Steamship, and Pacific Coast Steamship Cos.—are 
closely interrelated through stock ownership. 

The aforementioned carriers also have, or recently have had, 
traffic agreements with the two dominant carriers on the Yukon 
25655®— VOL 4—14-23 



854 STEAMSHIP COMPANY AFFILIATIONS ON THE PACIFIC COAST. 

River Route, viz, the Northern Navigation Co. (operating 34 steam¬ 
ers and 45 barges with a total of 32,619 gross tons) and the Mer¬ 
chants’ Yukon Line (operating 10 steamers and 23 barges with a 
total gross tonnage of 14,644). Both of these companies, as already 
stated, quote the same rates on through business between Puget 
Sound and Yukon River points exchanged with the Alaska Steam¬ 
ship and Pacific Coast Steamship Cos. at the mouth of the Yukon. 
The Alaska Steamship Co. states in its answers to the Commit¬ 
tee’s Schedule of Inquiries that it has an arrangement with the 
Northern Navigation Co. for through routing and a division of 
through rates on traffic destined to points on the Yukon River in 
Alaska, this arrangement, however, to expire on December 31, 1912. 
On the other hand, the Western Alaska Steamship Co. (two-thirds 
of whose stock is owned in equal portions by the Alaska and Pacific 
Coast Steamship Cos.) reports that it has a traffic arrangement for 
the interchange of freight at St. Michael with the Merchants’ Yukon 
Line, the arrangement being based on a percentage division of 
through freight rates quoted in a joint through tariff. The Northern 
Navigation Co., it may be added, represented at the time of organiza¬ 
tion a consolidation of the Alaska Commercial Co., the Alaska Ex¬ 
ploration Co., the Empire Transportation Co., and the Seattle-Yukon 
Transportation Co.; and following its organization absorbed the 
Alaska-Yukon Transportation Co. and the firm of Thebo & Oachon. 
All of its capital stock of $2,125,900 is owned by the Alaska Com¬ 
mercial Co., the Alaska Gold Fields, Ltd., the International Mer¬ 
cantile Marine Co., and the Northern Commercial Co. Four of the 
directors and important officers of the Northern Navigation Co. are 
also directors and officers of the Alaska Packers’ Association, a 
private carrier operating 31 steamers, schooners and other vessels 
(with a total of 41,750 gross tons) between San Francisco and Puget 
Sound ports and the Alaska canneries of the Association. 

Not only have the aforementioned companies entered into traffic 
arrangements with the two dominant Yukon River lines connecting 
at St. Michael, but according to the latest advices received by the 
Committee, the Alaska Steamship and Pacific Coast Steamship 
Cos., together with the Canadian Pacific Railway Co. and the 
Pacific & Arctic Railway & Navigation Co., also control the so-called 
White Pass & Yukon Route via Skagway. This route comprises the 
steamship service from Puget Sound and Vancouver to Skagway (at 


STEAMSHIP COMPANY AFFILIATIONS ON THE PACIFIC COAST. 355 

which port the entire wharfage facilities are said to be owned by the 
North Pacific Wharf & Trading Co.), thence by railroad^ to the 
headwaters of the Yukon River, and thence by boat down the Yukon 
to Da^vson and other points. According to the report of the Inter¬ 
state Commerce Commission ^ the one steamer of the Humboldt 
Steamship Co. was operated during 1902 and 1903 in conjunction 
with the Alaska Steamship Co., under an arrangement whereby the 
Alaska and Pacific Coast Cos. collected freight money and sold 
tickets for the Humboldt Co. upon a commission basis. Upon 
the termination of this arrangement, early in 1909, the White Pass 
& Yukon Route et al. cancelled their through routes and joint rates 
with the Humboldt Co. As the Humboldt Steamship Co. reported 
to the Committee, under date of October 10, 1912, “ we have a verbal 
arrangement with the White Pass & Yukon Route for through bill¬ 
ing of freight and through ticketing of passengers beyond Skagway, 
Alaska, but there are no joint rates, the through rates being the sum 
of the locals.” 

The situation in this respect, until very recently at least, is fully 
set forth in the case of United States v. Pacific & Arctic Railway 
& Navigation Co., Pacific Coast Steamship Co., Alaska Steamship 
Co., and the Canadian Pacific Railroad Co.,® decided April 7, 1913. 
From the facts outlined in this case it appears that by mutual agree¬ 
ment among the Alaska Steamship and Pacific Coast Steamship 
Cos., the wharves company, and the “ railway company ” through 
routes and joint rates were established, thus making one continuous 
line of common carriers for freight and passengers between the 
United States and northern Alaskan ports. By agreement, however, 
the railway company “ refused to make any through route or joint 
rates with the Humboldt Co., or with any of the independent steam¬ 
ship lines, and refused to bill freight or passengers from the United 
States to Yukon River points or reversely, except by ships belonging 
to one of the defendant lines.” By the same arrangement the rail- 

1 The White Fass & Yukon Route is the trade name applied to the route composed of 
the Pacific & Arctic Railway & Navigation Co., British Columbia Yukon Railway Co., 
British-Yukon Railway Co., and the British-Yukon Navigation Co. (Ltd.), all appearing to 
be operated under a common control or arrangement for through carriage. These various 
companies are designated hereafter, both in the text and in the cases to be referred to, as 
the “ railway company.” 

2 Humboldt Steamship Co. v. White Pass & Yukon Route et al. Opinion No. 1347, 

decided June 6, 1910. 

»228, U. S., 87 and following. 





356 STEAMSHIP COMPANY AFEILIATIONS ON THE PACIFIC COAST. 

way company fixed local rates between Skagway and the Yukon 
River which were very much higher than the railroad’s prorata 
share of the through rates; while the wharves company charged $2 
a ton for freight if shipped on a vessel not owned by one of the 
defendant companies, but only $1 to those who had entered into or 
were about to enter into a contract to have all shipments carried by 
the defendant lines. As a result of this agreement, it is stated in 
the case: 

Shippers were compelled to use only the ships of the defendant companies, 
as in that way alone could lower through rates be obtained. Competition in 
water transportation was destroyed between the defendant steamship com¬ 
panies and the independent lines, defendants obtaining a monopoly of the trans¬ 
portation business between the United States and Alaska, and the Humboldt 
Steamship Co. was discriminated against in the matter of through rates. 

The only possibility of competition is in the water part of this route. The 
entire transportation is controlled, and the means of control is an agreement 
between the defendants to throw all the trade into the hands of the defendants’ 
steamship companies, by the railroad company establishing through rates and 
joint rates with them and refusing to do so with the Humboldt Co. or any 
of the independent companies. 

The wharves company gave its assent by its wharfage charges and all eva¬ 
sion was prevented by so fixing the local rates that their combination was 
greater than the through rate agreed upon. It is manifest that the scheme was 
effective and cut out the Humboldt line and the independent lines as factors 
in the routes of transportation between the United States and the Yukon River 
points. 

In conclusion, reference should be made to the Alaska Coast Co., 
which operates four vessels (with a total of 5,497 gross tons) on the 
Southeastern and Southwestern Alaska routes. Sixty-four per cent 
of this company’s capital stock is owned by the Pacific Alaska Navi¬ 
gation Co., which is merely a holding and not an operating company. 
Both companies have reported to the Committee that they are not 
parties to any agreements or understandings with any other rail or 
water line. The Alaska Coast Co. also reported that it ‘‘has no 
through routing arrangement or joint tariffs with any other carrier, 
water or rail, and all traffic delivered to or received from any other 
carrier is handled on a strictly local basis.” A comparison of its 
current rates to and from Seattle and Tacoma with those of the 
Alaska Steamship and Pacific Coast Steamship Cos. shows them to 
be the same for a considerable number of the Alaska ports, while for 
the remaining ports the rates are different in about one-half of the 
articles enumerated. 


STEAMSHIP COMPANY AFFILIATIONS ON THE PACIFIC COAST. 857 

The Trade Between the Atlantic and Pacific Seaboards of the United 

States.^ 

Enumeration of routes and steamshi'p services. —Three water routes 
connect the Atlantic and Pacific Seaboards of the United States, viz, 
(7) The all-water route for sailing vessels via Cape Horn, 
and for steamers via the Straits of Magellan. Although largely used 
at one time, this route is comparatively unimportant to-day, especially 
since 1907, when the American-Hawaiian Steamship Co. began to 
operate via the Isthmus of Tehuantepec. Since that date nearly all 
the shipping via the all-water route has been confined to chartered 
steamers and sailing vessels which transport such bulimy cargoes as 
can be carried economically on so long a voyage. 

(^) The Tehuantepec Route. —All traffic via this route is car¬ 
ried both on the Atlantic and Pacific sides by the American-Hawaiian 
Steamship Co. The route used by the company extends from New 
York (this being the only Atlantic port regularly handling any 
through domestic traffic via this route) to Puerto Mexico, thence 
across the Isthmus of Tehuantepec by the Tehuantepec National 
Railway Co. to Salina Cruz, and thence to Pacific Coast and Hawaiian 
ports. Toward the close of 1912 the company operated 21 steamers of 
136,753 gross tons. The company has $5,000,000 of common stock 
outstanding, of which the Tehuantepec National Railway Co. (owned 
by the Mexican Government) owns $1,177,000. The company also 
has a traffic arrangement with the Tehuantepec National Railway 
Co. by which it agrees to operate via the Isthmus of Tehuantepec, the 
railway company to receive one-third of the net freight. If the net 
earnings of the American-Hawaiian Co. via this route are not equal 
to the per ton earnings realized when it carried cargo via the Straits 
of IMagellan route, the railway company is to contribute toward sucli 
deficiency to the extent of a reduction of from one-third to one-fourth 
of the net freight earnings. With the exception of this arrangement 
(which is subject to cancellation upon the opening of the Panama 
Canal), the company reported to the Committee that it is not at 
present a party to any agreements, understandings or working ar- 

1 For an exhaustive treatment of this subject as regards the volume and nature of the 
traffic handled, and a comparison of rates charged by rail and water carriers, see Prof. 
Emory R. Johnson’s Report on “ The Relation of the Panama Canal to the Traffic and 
Rates of American Railroads,” published as Chapter IV of his Report on “Panama Canal 
Traffic and Tolls,” 1912. 





358 STEAMSHIP COMPANY AFFILIATIONS ON THE PACIFIC COAST. 

rangements with any other land or water carriers, and that it is not 
the owner of any securities of any other transportation companies. 

(S) The Panama Route. —This route comprises one Atlantic 
service from New York to Colon via the Panama Kailroad Steam¬ 
ship Line to Colon and across the Isthmus by the Panama Railroad 
Co. (controlled by the United States Government), and until re¬ 
cently, two Pacific Coast services, viz, the Pacific Mail Steamship 
Co. and the California-Atlantic Steamship Co.^ The Pacific Mail 
Steamship Co. operates three services (consisting of nine steamers 
with a total of 27,354 gross tons) between San Francisco and Balboa, 
the steamers calling en route at the port of San Pedro, the Mexican 
ports of Mazatlan, San Bias, Manzanillo, Acapulco and Salina Cruz, 
and numerous west coast Central American ports; while the vessels 
(4 leased steamers of 13,030 gross tons) of the California-Atlantic 
Steamship Co. operated from San Francisco directly to Balboa and 
stopped at San Pedro on the return voyage. Of the $20,000,000 of 
the Pacific Mail Co.’s capital stock the Southern Pacific Co. owns 
$10,010,000, or a slight majority. 

{Ji) The so-called Sunset-Gulf Route’’’^ consisting of the 
combined rail and water lines of the Southern Pacific Co. The 
Southern Pacific is the only railroad controlling a through route 
between the Atlantic and Pacific seaboards, since the Morgan Line 
(controlled by the Southern Pacific) operates steamers betw^een New 
Orleans and Galveston—the Gulf termini of the Southern Pacific— 
and New York, thus enabling the railroad company to compete not 
only with the other transcontinental railroads but with the several 
intercoastal water routes. 

Volume of Intercoastal Traffic via the several routes."^ —Exclu¬ 
sive of the American-Hawaiian Line’s heavy sugar traffic and 
the freight handled by the Sunset-Gulf Route, the freight move¬ 
ment between Atlantic and Pacific ports of the United States, both 
eastbound and westbound, increased from 469,027 tons in 1906 to 
808,135 tons in 1911 or 72.3 per cent, and the total traffic during the 
same period, including Hawaiian sugar, from 560,727 to 1,104,735 tons, 
or 97 per cent. It has been estimated that of the total westbound 

1 This company became bankrupt and was dissolved during the past year, 

2 For a detailed table of the eastbound and westbound movement of freight via the sev¬ 
eral intercoastal water lines, see Prof. Emory R. Johnson’s Report on “ The Relation of 
the Panama Canal to the Traffic and Rates of American Railroads,” published as Chapter 
IV of his Report on “ Panama Canal Traffic and Tolls,” 1912, pp. 50-51. 




STEAMSHIP COMPANY AFFILIATIONS ON THE PACIFIC COAST. 359 

tonmge from Pacific to Atlantic Coast ports of the United States, 
both rail and water, about 90 per cent moves by rail and about 10 
per cent by the water routes, and that of the east bound tonnage the 
railroads carry about 90 to 95 per cent and the water carriers about 
5 to 10 per cent. For the year 1911 the total volume of intercoastal 
water traffic, both eastbound and westbound, was divided among the 
several lines or-routes as follows:^ Panama Railroad Steamship 
Line from New York to Colon and return, 172,499 tons; Pacific Mail 
Steamship Co., 76,972 tons; California-Atlantic Steamship Line’s 
Pacific service, 134,545 tons; American-Hawaiian Line, 458,300 tons; 
and the Cape Horn and Magellan route, 157,608 tons. During the 
six years from 1906 to 1911 inclusive, “the traffic handled by the 
regular lines more than trebled, while that carried by individual 
vessels decreased more than 50 per cent. In 1911 82.8 per cent of the 
entire traffic, other than Hawaiian sugar, was carried by the regular 
lines, whereas in 1906 only 42.1 per cent was shipped by the estab¬ 
lished steamship lines.” ^ 

The foregoing figures indicate a rapid growth of traffic via the 
Tehuantepec route, which represents a shorter and better route for 
intercoastal traffic than is afforded by way of Panama. Aside from 
the competition of the American-Hawaiian Line, however, the rela¬ 
tive decline in importance of the Panama route is also due (1) to the 
limitations necessarily placed upon the volume of commercial freight 
handled by the Panama Railroad Co. owing to the construction of 
the Canal, first by the French company between 1882 and 1889, and 
again from 1904 to date; and (2) the competitive methods adopted by 
the transcontinental railroads. The nature of the artificial restraints 
which the transcontinental railroads have exercised over the move¬ 
ment of traffic via the Panama route have been repeatedly set forth 
in government reports and congressional hearings,® and therefore 
need only be briefly referred to. The situation is well summarized 

1 See Prof. Johnson’s Report, pp. 50-51. 

2 See Prof. Johnson’s Report, p. 53, 

3 The relations between the Panama Railroad Co., the Pacific Mail Steamship Co. 
and the transcontinental railroads are fully set forth in the report of Joseph L. Bris¬ 
tow to the Secretary of War (S. Doc. No. 429, 59th Cong., 1st sess.) ; the hearings 
before the Senate Committee on Interoceanic Canals on Senate Bill 428, parts 1, 2, and 
3, 1910 ; the Hearings before the Senate Comnrittee on Interoceanic Canals (62d Cong., 
2d sess.), on H. R. 21969, 1912; and the Panama Canal Hearings before the House Com¬ 
mittee on Interstate and Foreign Commerce (62d Cong., 2d sess.), 1912. 





360 STEAMSHIP COMPANY AFFILIATIONS ON THE PACIFIC COAST, 


in the following extracts selected from the reports prepared by Prof. 
Emory E. Johnson and the Bureau of Corporations: 

“ The transcontinental railroads, until recently, have maintained a relentless 
competitive warfare against the Panama route. The through rail rates between 
the Atlantic and Pacific seaboards are lower than the rates for shorter hauls 
to and from the intermediate points in the Rocky Mountain territory; and, 
until the Government regulation of railroads became eifective the railroad 
companies quoted shippers such rates as were necessary to keep traflSc from 
taking the Panama route. Moreover, the transcontinental railroads were able 
to restrict the use of the Panama route through their close relations with the 
Pacific Mail Steamship Co., which has, for most of the time, been the only 
regular line between the west-coast ports of the United States and Panama. 
For a period of 20 years, ending in 1893, the railroads, through the Transconti¬ 
nental Association, paid the Pacific Mail Steamship Co. a fixed monthly sum, 
or rental, for the freight space available in its steamers, and thus completely 
controlled the Pacific Mail as a competitor. From 1900 to the present, the 
Southern Pacific Co. has owned a majority of the stock of the Pacific Mail 
Steamship Co.” ^ 

“ The period from 1870 to 1877 was taken up with a struggle for supremacy 
between the Panama and transcontinental route. Some time prior to 1878 a 
contract was entered into between the Pacific Mail and the Transcontinental 
Railway Pool, whereby the latter practically controlled the rates of the former. 
This period extended from 1878 to 1893. The Transcontinental Railway Pool 
paid the Pacific Mail $90,000—later reduced to $75,000—a month for space rep¬ 
resenting 1,200 tons per month in each direction on the Pacific Mail’s vessels. 
The Pacific Mail in turn contracted in 1878 to pay the Panama Railuoad 
$75,000 a month—later reduced to $55,000—for the exclusive privilege of bill¬ 
ing through freight between New York and San Francisco over the Panama 
Railroad. These contracts were canceled in 1893. The Pacific Mail perma¬ 
nently withdrew its Atlantic line in that year and the Panama Railroad put 
on its own fleet, which is still being operated. 

“ Although the Southern Paciflc Co did not acquire a controlling interest in 
the stock of the Paciflc Mail until 1900, there had been a community of inter¬ 
ests through identical stockholders since some time before 1893. The Panama 
Railroad twice put fleets on the Pacific side, twice lost money thereby, and 
twice again entered into exclusive contracts with the Pacific Mail. The second 
contract was still in force when the United States Government acquired the 
Panama Railroad in 1904. The contract was abrogated by the Government in 
1905. From 1905 to 1910 the Panama Railroad and the Pacific Mail operated 
in connection with each other under a working agreement. Since 1910 the 
Panama Railroad has had two domestic Pacific connections, the Pacific Mail 
Steamship Co. and the California-Atlantic Steamship Co.” * 

1 Prof. Emory R. Johnson’s Report on “ The relation of the Panama Canal to the Traffic 
and Rates of American Railroads,” 1912, p. 51. 

2 Report of the Commissioner of Corporations on “ Control of Water Carriers by Rail¬ 
roads and by Shipping Consolidations,” Dec. 2.”, 1912, pp. 47-48. 



STEAMSHIP COMPANY AFFILIATIONS ON THE PACIFIC COAST. 361 

It may be added that the Sunset-Gulf route, immediately upon its 
establishment in 1883, also waged a determined fight against its 
rail and water competitors. As explained by Prof. Johnson in 
this connection: 

“ The transcontinental railroads, other than the Southern Pacific, ran from 
The Mississippi and Missouri Rivers to the Pacific coast and were primarily 
interested in the development of trafiic between the Middle West and the 
Pacific coast. The rates by the Sunset-Gulf route from New York to San 
Francisco were made the same as the rates by the transcontinental lines from 
St. Louis and Missouri River crossings to the Pacific. Gradually the rates by 
the through all-rail lines from the Atlantic to the Pacific were made the same 
as the rates from Chicago, St. Louis, and Missouri River crossings to the 
Pacific seaboard. This system of blanket rates was worked out by 1896, and 
has since prevailed on west-bound traffic. The establishment of the same rates 
by the Sunset-Gulf route and by the all-rail lines between the two seaboards al¬ 
lied the Sunset-Gulf route with the all-rail lines as common competitors against 
the water routes around South America and via the Isthmuses of Panama 
and Tehuantepec. The control of the Pacific Mail Steamship Co. by the trans¬ 
continental railroads since 1874, and the ownership of the Pacific Mail by the 
Southern Pacific from 1890 to the present, enabled the transcontinental rail¬ 
roads, as has been explained, to keep the traffic by the water routes within small 
proportions, until a few years ago, when the American-Hawaiian Steamship 
Co., and later the California-Atlantic, developed a relatively large tonnage 
coastwise via the Tehuantepec and Panama routes. This development of the 
coastwise business during the last few years has not been seriously opposed 
by the railroads, doubtless because of the rapid development of the rail tonnage 
consequent upon the industrial progress of the Intermountain and Pacific 
Coast States.” ^ 

Influence of Intercoastal water carriers upon transcontinental 
rates ?—All authorities are agreed that the intercoastal steamship 
lines have exerted a marked influence upon the rates of the transcon¬ 
tinental railroads. While the rates over the Sunset route (which, as 
already indicated, is allied with the all-rail lines) are the same as 
the all-rail charges, the rates on the two Isthmian routes are from 
20 to 60 per cent below the transcontinental railway tariffs. No fixed 
differential, however, exists, the water rates on the various com¬ 
modities being sufficiently below the rail charges to obtain a suf- 

1 Prof. Johnson’s Report on “ Panama Canal Traffic and Tolls,” 1912, p. 52. 

a For a detailed explanation of this subject see Prof. Emory R. Johnson’s Report, 
” The Relation of the Panama Canal to the Traffic and Rates of American Railroads,” 
published as Chapter IV of his Report on ” Panama Canal Traffic and Tolls,” 1912, 
which furnishes detailed tables of the rates charged by the railroads and water car¬ 
riers, both eastbound and westbound, pp. 58-72, 




362 STEAMSHIP COMPANY AFFILIATIONS ON THE PACIFIC COAST. 

ficient volume of desirable freight. But while the coast-to-coast 
steamship lines have undoubtedly influenced transcontinental rail 
rates, these lines, in turn, are to-day making their rates with refer¬ 
ence to the rail tariffs. “ The competition of the water routes with 
ihe rail lines,” as reported by Prof. Johnson, “ and the recurring 
rate wars have, in the past, forced the transcontinental railroads to 
adopt the system of rate making now in force; but during recent 
years rate wars have been avoided; the transcontinental railroads 
have not been under pressure to fight against the water lines for 
traffic; the tonnage moving by rail has been large and has rapidly 
increased; and the policy of the railroads has been to maintain, and 
where practicable, to raise the established levels of rail tariffs.”^ 
The President of the American-Hawaiian Line franklv admitted in 
his testimony before the Senate Committee on Interoceanic Canals 
that his line followed more or less the rates determined bv the trans- 
continental railroads, and stated: '‘We are friendly with them (the 
railroad managers). We discuss rates. I don’t know of any other 
business in the world where competitors don’t get together and talk 
matters over. We are not tied up; we are not committed. We do as 
we please, absolutely untrammeled. * traffic manager 

doesn’t attend the conference of the railroads, but he goes to Chicago 
and gets his ear pretty close to the ground. Thais his business.”- 
A comparison of the rates of the Panama line with those of the 
American-Hawaiian Line shows that with reference to about one- 
third of the articles enumerated the rates via the twm Isthmian 
routes are the same, but that in many instances the Panama rates 
slightly exceed the Tehuantepec rates and vice versa. Thus, upon 
comparison of the rates on the first 60 articles mentioned in the volu¬ 
minous rate schedules submitted by the lines to the Committee, the 
following results are found: In 23 instances the rates via the Te¬ 
huantepec and Panama routes are the same; in 25 instances the 
rates are nearly alike, the difference being 5 cents or less per 
hundred pounds, and in all except five of these cases the American- 
Hawaiian Line’s rates are less than the Panama rates; and in 12 
instances the difference exceeds 5 cents (usually 10 cents), the 
Panama rates in all cases being the larger. But in making such 
a comparison account should be taken of the difference in the services 

^ Prof. Einory R. Johnson’s Report, p. 78. 

Senate Hearings on Bill 3428, Feb. 10, 1910, p. 90. 



STEAMSHIP COMPANY AFFILIATIONS ON THE PACIFIC COAST. 363 

rendered by the lines operating on the two routes, the rates of the 
American-Hawaiian Line applying only to and from coast terminals, 
while “the Panama line absorbs railroad rates from interior points 
to the extent of 20 cents per hundred pounds on westbound shipments, 
and the entire railroad rates to certain interior points in Cali¬ 
fornia,”^ thus making this line’s rates the lowest on shipments to 
and from the interior. 

Traffic arrangements between the Intercoastal Lines. —Chiefly with 
a view to keeping rates on a remunerative basis and protecting its 
connecting carriers, the Panama Pailroad Co. had, at the time of the 
Committee’s hearings, a traffic arrangement with the Pacific Mail 
and California-Atlantic Lines for the exchange of freight, whereby 
rates were divided in the proportion of 40 per cent, to the Panama 
Pailroad Co. and 60 per cent, to the Pacific carriers. According to 
the explanation of Mr. P. P. Pogers, General Counsel of the Panama 
Pailroad Co., his company’s circular provided that if the through 
rate 'svas less than the minimum rate it would, nevertheless, deduct 40 
per cent, of the minimum rate, so that the two connecting lines would 
have to absorb the difference. He further testified that: “We (Pan¬ 
ama Pailroad Co.) had in view that, by affording free terminals and 
coal, if one line endeavors to drive the other out of existence we could 
protect the line that was not at fault. The theory back of this ar¬ 
rangement, so far as the Panama Pailroad Co. was concerned, was 
to preserve this competition from Balboa to the Pacific Coast. We 
realized that if either one of these lines were to go out that we would 
be again placed, with reference to our coastwise business, wholly at 
the mercy of the other line.” ^ The correspondence submitted to the 
Committee shows that the Pacific Mail Steamship Co. regularly ad¬ 
vised the Panama Pailroad Co. whenever they had agreed with the 
California-Atlantic Co. to put into effect certain changes in rates 
from San Francisco to New York. 

But while the Pacific Mail and California-Atlantic Lines observed 
the same rates by virtue of an arrangement, Mr. E. D. Douglass, 
Treasurer of the American-Hawaiian Line, reported to the Com- 

1 Prof. Emory R. Johnson’s Report, p. 70. 

^ See page 478 of the testimony of R. R. Rogers before the Senate Committee on Inter- 
oceanic Canals, 62d Cong., 2d sess., on H. R. 219C9, May 20. 1912. For a full statement 
of the arrangement between the Panama Railroad Co. and its connecting carriers—the 
Pacific Mail and California-Atlantic Steamship Cos.—see the above reference, pp. 476 
and following. 





364 STEAMSHIP COMPANY AFFILIATIONS ON THE PACIFIC COAST. 

mittee that his line is not a party directly or indirectly to any agree¬ 
ments or understandings with either the Panama Raih'oad Co. or 
its two connecting carriers. Mr. R. P. Schwerin, Vice President and 
General Manager of the Pacific Mail Steamship Co., however, when 
testifying before the Committee, stated that the American-Hawaiian 
Line was maintaining rates with the other lines, and offered the 
following explanation: “ The Pacific Mail is working under an 
agreement for the maintenance of rates with the Government, the 
Government having put rates into effect and held that the two car¬ 
riers on the Pacific—the California-Atlantic and the Pacific Mail 
Steamship Cos.—must maintain those rates east and west bound 
under threat of cancellation of the through-billing privilege. They 
also wanted us to enter into an arrangement with the American- 
Hawaiian Steamship Line, by which the American-Hawaiian Line 
would maintain the same rates by way of Tehuantepec as were main¬ 
tained by way of Panama, and we declined to do it on the ground 
that it was contrary to the Sherman Anti-Trust law; so that the 
American-Hawaiian Line was practically told that if they under¬ 
took to cut rates the Government would put their own line on the 
Pacific and would put the Treasury of the Government behind it 
to make the American-Hawaiian Line maintain rates.” (Vol. 2, 
p. 878.) To the question: “In other w^ords, the American-Hawaiian 
Co. now maintains rates with your company and with the Govern¬ 
ment line?” Mr. R. P. Schwerin answered affirmatively, and stated 
that such maintenance of rates was at the instance of the Govern¬ 
ment. (Vol. 2, p. 879.) It should be stated that a similar charge 
was brought before the Senate Committee on Interoceanic canals, 
and that in answer to the same Mr. R. R. Rogers replied to the effect 
that all the officials of the Panama Railroad Co. were anxious to 
avoid violating the Interstate Commerce Act and that, while it 
was doubtful whether the Panama Railroad Co. came under 
the Interstate Commerce Act, he had, as general counsel of the 
company, always advised the officials that they should comply 
with the law.^ The Panama Railroad Co., he further testified, was 
anxious to protect the California-Atlantic Line, as long as it observed 
the aforementioned traffic arrangement, against the competition of 
the American-Hawaiian Line, but advised the line that no agree- 

^ Hearings before the Senate Committee on Interoceanic Canals on H. R. 21969, May 
20, 1912, p. 480. 




STEAMSHIP COMPANY AFFILIATIONS ON THE PACIFIC COAST. 365 

ment could be effected with the American-Hawaiian Co. with regard 
to rates. The position taken by the Panama Eailroad Co. with the 
American-Hawaiian people in this respect was outlined by him in 
the following words: 

We said that, as a matter of equity and justice, their (American-Hawaiian 
Line’s) rates ought to be higher than ours, just as the rates on the all-rail 
route from San Francisco to New York ought to be higher than theirs. I said: 

There is a natural differential in favor of the Panama route; but the matter 
must rest entirely with you. We are going to put into effect on a certain date 
a certain tariff of rates, and you will have to guide your conduct by what you 
consider just and right. So far as we are concerned, we simply are trying 
to protect our connections and keep them in business.’ That applied to the 
Pacific Mail Steamship Co. and the California-Atlantic line. I said, further, 
that: * The Panama Railroad Co. is in the situation, so far as they are con¬ 
cerned, to handle the business at less than cost, if anybody makes it necessary, 
and, rather than see our people driven out of business and sacrificed in any 
way, we propose to stand by them and protect them, even if we have to 
to cut our rates to do it.’ That is all that ever transpired, so far as the 
American-Hawaiian line is concerned. They never made any declaration as 
to rates, and as a matter of fact, they never did establish rates which we con¬ 
sidered fair and just. The rates they subsequently put into effect were rates 
which gave them some advantage over the Panama route, but, on account of 
certain advantages via the Isthmus, we managed to get along.”* 

The Hawaiian Trade. 

Enumeration of lines operating to and from the United States .—• 
Four regular lines connect Hawaiian ports with those of the United 
States, three—the Pacific Mail Steamship Co., the Matson Navi¬ 
gation Co., and the Oceanic Steamship Co.—operating only to and 
from San Francisco, and one—the American-Hawaiian Steamship 
Co.—extending its service to New York. Unlike the first three lines^ 
the American-Hawaiian Co. has no service between San ’Francisco 
and Hawaii in either direction, .its steamers destined for .Hawaiian 
ports carrying westbound cargo northward to Puget Sound and, 
after loading additional cargo, proceeding to Honolulu. Cargo 
from New York, westbound, destined for Hawaii, is taken at Salina 
Cruz—the Pacific .terminus of the Tehuantepec National Eailway 
Co.—in the ships which sail for Hawaiian ports from Puget Sound. 
The return voyage from Hawaii to New York, however, is direct 

1 Hearings before the Senate Committee on Inter-Oceanlc Canals on H. R. 21P69. 
May 20, 1912, p. 481. 



366 STEAMSHIP COMPANY AFFILIATIONS ON THE PACIFIC COAST. 

via Salina Cruz, since the exports of the Islands are of such a na¬ 
ture—mostly sugar and pineapples—as to make unnecessary a return 
voyage to Puget Sound. In other words, the line has certain steam¬ 
ers which proceed to Hawaii from Puget Sound and from there back 
to Salina Cruz, while its steamers engaged in the Pacific coastwise 
trade go north to Portland and return via San Francisco to Salina 
Cruz. Although the published maps showing the routes of the com¬ 
pany indicate a service between San Francisco and Honolulu, the 
company has reported, by way of explanation, that it has, as a matter 
of precaution, a reserve steamer on the Pacific which is chartered 
to the Matson Navigation Co., and is run by that company between 
San Francisco and the Hawaiian Islands. It occasionally happens 
that if one of the American-Hawaiian Line’s Pacific steamers des¬ 
tined to Hawaii via Puget Sound gets behind schedule, the steamer 
chartered to the Matson Line is dispatched from San Francisco to 
Honolulu with the New York freight, but under these circumstances 
there is no time to secure or load freight for Honolulu in opposition 
to the regular lines in that business, viz, the Matson Navigation, 
Pacific Mail Steamship, and Oceanic Steamship Cos. 

Of the three lines operating to and from San Francisco, the Mat- 
son Navigation Co. confines its operations to the Hawaiian trade, the 
Pacific Mail makes Honolulu a port of call in its service to and 
from the Orient, and the Oceanic Steamship Co. conducts two 
services, one a local service from San Francisco to Honolulu and 
return, and the other from San Francisco via Honolulu and Tutuila 
to Sydney, Australia. Mr. E. P. Schw^erin testified (Vol. 2, p. 924) 
that the Pacific Mail handles only a very small volume of the 
traffic to and from Hawaii and that the Matson Navigation Co. is 
the dominant carrier in the trade. This company (operating six 
steamers of 29,311 gross tons, besides some sailing vessels and barges) 
has common stock outstanding of $1,773,600. Besides being the ' 
dominant carrier in the traffic to and from San Francisco, it is also 
the principal owner of boats engaged in towing at the several 
Hawaiian ports. The Oceanic Steamship Co. (operating three 
steamers of 18,551 gross tons) has outstanding- $2,635,300 of com¬ 
mon stock and $3,007,070 of bonds and notes, and is controlled by the 
Spreckles interests. 


STEAMSHIP COMPANY AFFILIATIONS ON THE PACIFIC COAST. 367 

The Int'er-Island Trade of Hawaii. —This trade is carried almost 
exclusively by the Inter-Island Steam Navigation Co. (Ltd.), which 
is a successor to the firm of Thos. R. Foster & Co. (the original 
founders of the company), and which, in 1905, acquired the Wilder 
Steamship Co. The latter company was organized in 1883 with a 
capital of $500,000, and although to some extent a competitor of the 
Inter-Island Steam Navigation Co., it seems that the two companies 
.effected a territorial division of the trade. In the meantime, the 
directors of the Inter-Island Co. individually purchased the shares of 
the Wilder Steamship Co. until they had 3,019 of the 5,000 shares 
outstanding. These were offered to the stockholders of the Inter- 
Island Co. at actual cost and in proportion to the number of shares 
held by them. Subsequently, an increase in the capital stock of the 
Inter-Island Co. was authorized and the entire holdings of the 
Wilder Steamship Co. were purchased with $750,000 of this author¬ 
ized increase.^ This acquisition of the Wilder Steamship Co. gave 
the Inter-Island Co. practically a monopoly of the inter-island traffic, 
and left it virtually unaffected by the few small schooners operat¬ 
ing in the trade. Toward the close of 1912 the company operated 
17 steamers (of 10,896 gross tons) on 9 routes between the islands. 
The company owns stock and bonds in numerous Hawaiian corpora¬ 
tions, including a controlling interest in Alexander and Baldwin 
(Ltd.), which is said to operate steamers at one or two Hawaiian 
ports. 

Relations between the lines operating in the Hawaiian trade .—• 
All the lines operating between San Francisco and Hawaii filed 
printed tariffs with the Committee, and a comparison of these tariff's 
shows that the rates as published are the same for all the lines both 
eastbound and westbound. Acpording to the returns to the Com¬ 
mittee’s Schedule of Inquiries, the Matson Line (the dominant car¬ 
rier in the trade between San Francisco and Hawaii) and the' 
Inter-Island Steam Navigation Co. (the dominant carrier in the 
inter-island trade) are closely affiliated. The Inter-Island Co. re¬ 
ported that it has a traffic arrangement with the Matson Co. for the 
carrying of freight arriving from San Francisco to the various 
Hawaiian ports, which arrangement stipulates that the vessels shall 


1 The method of acquiring the Wilder Steamship Co. was reported by the Inter-Island 
Co. in its answers to the Committee’s Schedule of Inquiries. 







368 STEAMSHIP COMPANY AFFILIATIONS ON THE PACIFIC COAST. 

operate over certain designated routes and that the charges shall be 
as per the regular schedule. Moreover, Alexander & Baldwin (Ltd.) 
(controlled by the Inter-Island Co.) owns $200,000 of the stock of 
the Matson Co., and August Drier (Ltd.) and Chas. M. Cooke (Ltd.) 
are also stockholders in both companies for considerable amounts. It 
may be added that Mr. A. B. Spreckels, Vice-President, Treasurer 
and Director of the Oceanic Steamship Co. is one of the 10 largest 
individual stockholders in the Matson Navigation Co., and that Mr. 
W. D. K. Gibson, a director of the Oceanic Steamship Co., is also a 
director and one of the 10 largest individual stockholders in the 
Matson Co. 




CHAPTER XIIL 

STEAMSHIP COMPAHY AFFILIATIONS ON THE ATLANTIC AND 

GULF COASTS. 


The Predominant Importance of Lines Controlled by Railroads and Ship¬ 
ping Consolidations. 

On this leading water highway of American commerce practically 
all the large regular steamship lines are either oontrolled by rail¬ 
roads or are subsidiaries of one of two large shipping consolida¬ 
tions—the Eastern Steamship Corporation and the Atlantic, Gulf 
& West Indies Steamship Lines. Exclusive of some very small and 
purely local lines, 28 lines, representing 235 steamers with a total 
of 549,821 gross tons, handle practically all of the traffic along 
‘ the entire Atlantic and Gulf coasts.^ Of the 235 steamers and 
549,821 gross tons referred to, the lines controlled by the railroads 
represent 54.5 per cent and 61.9 per cent, respectively; the lines of 
the Eastern Steamship Corporation, 11.3 per cent and 10 per cent; 
and the lines of the Atlantic, Gulf & West Indies Steamship Lines, 
18.2 per cent and 22 per cent. In other words, the steamers of the 
railroad-controlled lines combined with those of the Eastern Steam- 
i ship Corporation and the Atlantic, Gulf & West Indies Steamship 
' Lines number 199, or 84.7 per cent of the above-mentioned total 
I for the 28 lines, and represent 516,055 gross tons, or 93.9 per cent of 
f the foregoing total gross tonnage. 

Not only do the railroads and the two shipping consolidations 
r dominate over nine-tenths of the tonnage, but it is significant that 
I very few of the principal routes on our entire Atlantic and Gulf 
I coasts are served by more than one regular steamship line. Although 
( the details in this connection will be presented later, the more im- 
i portant illustrations may be enumerated here. Thus, with the 

■ » 1 Qf totals mentioned the lines controlled by the railroads represent 128 steamers of 

340 084 gross tons j the lines of the Eastern Steamship Corporation, 29 steamers of 
54,771 gross tons; and the coastwise lines of the Atlantic, Gulf & West Indies Steam¬ 
ship Lines, 42 steamers of 121,200 gross tons. 

25655°—VOL 4—14 - 24 


369 






370 AFFILIATIONS ON THE ATLANTIC AND GULF COASTS. 


exception of Portland, Boston has but one direct service to any lead¬ 
ing Atlantic coast port, and all of the lines connecting it with other 
coastwise ports are either under railroad control or are subsidiaries 
of the two shipping consolidations. Practically the same is true of 
New York, there being only one regular water carrier operating 
directly between this important center and the following ports: 
Portland, Boston, Philadelphia, Baltimore, Norfolk, Wilmington, 
Charleston, Savannah, Jacksonville, and New Orleans. Galveston 
is the only important Gulf port which has two services from New 
York—the Mallory and Morgan lines—but these, as will be shown 
later, work in absolute harmony. “ The importance of New York 
as a center of the domestic traffic,” reports the Commissioner of 
Corporations, “ is indicated by the fact that it has steamship lines 
to all of the other 22 leading Atlantic and Gulf ports. On the other 
hand, the importance of control by railroads and shipping consolida¬ 
tions is indicated by the fact that lines thus controlled reach 19 
of these ports, while independent lines reach only 6. Of 26 steam¬ 
ship services connecting New York with other important ports 
(except Albany and Isthmian ports), 11 are subsidiaries of ship¬ 
ping consolidations and 10 are controlled by railroads.” ^ The report 
of the Commissioner of Corporations contains a full tabulation of 
the routes between the 23 leading Atlantic and Gulf ports, and 
further states that: 

In tlie case of Philadelphia but 12 ports in the list are reached, and but 1 of 
these is served by more than one line. Of the 12 services connecting Phila¬ 
delphia with other ports 5 are subsidiaries of a shipping consolidation and 4 
are controlled by a railroad. 

Of the 10 steamship services connecting Baltimore with other important 
ports 7 are controlled by railroads, these serving 5 of the ports listed. Inde¬ 
pendent lines reach 3 of these ports; in all, Baltimore has steamship services 
to 8 of the 22 ports listed. It is worth pointing out that neither of the prin¬ 
cipal shipping consolidations has a service to Baltimore. 

Norfolk has 1 steamship line each to Boston, New York, and Philadelphia, 
and 3 to Baltimore. All of these are controlled by railroads except that to 
Philadelphia, and that is controlled by a shipping consolidation. * * ♦ q^i. 

veston has no direct steamship connection with Boston, Philadelphia, or Balti¬ 
more. (Report on Control of Water Carriers by Railroads and by Shipping 
Consolidations, Dec. 23, 1912, pp. 14-15.) 

' Report of the Commissioner of Corporations, Part IV, on “ Control of Water Cur¬ 
riers by Railroads and by Shipping Consolidations,” Dec. 23, 1912, p. 14. 




$ 

AFFILIATIONS ON THE ATLANTIC AND GULF COASTS. 371 

In explaining this apparent absence of port-to-port competition, 
Mr. H. H. Raymond, vice president and general manager of the 
Clyde & Mallory Steamship Cos., testified (vol. 2, pp. 1155-1158) 
that the tonnage from the Atlantic coast ports proper must be sup¬ 
plemented by tonnage from the interior since not a single port on 
the Atlantic coast would, with the business originating at the port, 
maintain even temporarily the services now conducted by the estab¬ 
lished lines. The volume of traffic moving from and via the ports of 
Boston, Providence, New York, Philadelphia, and Baltimore to and 
through the south Atlantic ports, he contended, is being transported 
promptly and at reasonable rates by the existing lines, “ no less than 
43 vessels leaving northern ports each week for South Atlantic and 
Gulf ports with an aggregate capacity for freight and passenger 
traffic much in excess of the present requirements.” He further em¬ 
phasized the point that the established lines in the Atlantic coastwise 
trade must necessarily be separate and distinct as regards their 
particular ports, not because port-to-port competition is avoided by 
mutual agreement (there being no such agreements according to his 
statement), but because of the desire to avoid the inevitable financial 
loss which would result if the several established lines should break 
into each other’s spheres of trade, especially when the existing lines 
have reached a position of strength in their respective trades and 
when the volume of traffic on each route is such as to leave no room 
for an additional line. To quote his testimony: 

My companies, as well as the other old companies now engaged in the coast¬ 
wise traffic, are, and most generally have been, separate and distinct. This 
is not because of any mutual understandings to avoid port-to-port competition, 
for none exists. The early operations of any steamship enterprise between two 
given ports are generally attended with financial losses before a successful line 
is established. These losses would be prolonged, if not perpetuated, if two lines 
attempted to operate where there is only room for one and not always that. 
Experienced steamship officers would no more think of having their companies 
enter a port adequately served by other companies than a railroad would con¬ 
sider paralleling a competitor’s tracks through a relatively barren country. It 
should not be assumed, however, that because two companies do not serve the 
ports they do not compete with one another for the greater percentage of 
traffic they handle; for as a matter of fact, in addition to the all-rail competi¬ 
tion, all steamship companies are aggressively soliciting and continually im¬ 
proving their service to obtain business for common territory reached by each 
through different ports or gateways. ♦ * • 


372 AFFILIATIONS ON THE ATLANTIC AND GULF COASTS. 


Should offerings of tonnage available for water carriage increase, the present 
companies would increase their service to meet the demands. Should others 
inaugurate a steamship service between the ports served by our companies, there 
could only be one of two results: If the same rates which we operate were main¬ 
tained and a service equal to ours was operated, there would be a division of 
the business, with the result and effect that we would either have to decrease 
our service or sustain losses; or if the rates which are operated and which are 
reasonable were cut by such competitors, we would be compelled to meet such 

reductions or discontinue our service. 

/ 

In either event it would mean a loss to our companies, and while considering 
the matter of diversified lines as between certain ports and the effect such 
additional service would have upon the revenues of the present companies, the 
shipper and consignee are to be considered, not only in so far as service is 
concerned, but in so far as their actual financial status is concerned. Rates, 
regardless of what they may be, must be stable and the same for one and all. 
Rate wars, contrary to the idea that seemingly prevails with many people, do 
not always redound to the benefit of the shipper and consignee, but on the con¬ 
trary mean bankruptcy to many, especially to the smaller shippers. (Vol. 2, 
pp. 1155-1156.) 

The New Eng^hvid Coastwise Trade. 

Nearly two-thirds (63.9 per cent) of the gross tonnage of all regu¬ 
lar coastwise lines operating to and from New England ports belongs 
to the New York, New Haven & Hartford Railroad Co. and the East¬ 
ern Steamship Corporation groups of lines. If we exclude the Mer¬ 
chants & Miners Transportation Co., the Clyde Steamship Co., and 
the Ocean Steamship Co., which connect New England ports with 
ports south of New York, these two consolidations represent 77 per 
cent of the steamers and over 88 per cent of the gross tonnage of the 
lines engaged in the strictly New England coastwise trade, including 
the port of New York. Moreover, two of the principal ports of New 
England—Boston and Portland—are connected with New York exclu¬ 
sively by the lines of the Eastern Steamship Corporation, while the 
New York, New Haven & Hartford Railroad Co.’s water lines largely 
control the traffic on Long Island Sound, competition being limited to 
a few comparatively small independent lines. It is also noteworthy 
that Boston is connected by only one steamship line with any port 
on the Atlantic coast with the exception of Portland, Me., where there 
are two lines; but one of these lines—the Maine Coast Co.—is so 
small as to afford little real competition with the much more costly 
steamers of the Eastern Steamship Corporation. 


AFFILIATIONS ON THE ATLANTIC AND GULF COASTS. 373 

Navigation com'panies controlled hy the New York^ New Haven & 
Hartford Railroad Co, —The diagram on the following page outlines 
in detail the various navigation companies and marine interests con¬ 
trolled by the New York, New Haven & Hartford Railroad Co. 
With only two exceptions—the Maine Central Railroad Co.’s steamers 
and the coal fleet of the New York, Ontario & Western Railway Co.— 
all the marine interests of the New York, New Haven & Hartford 
Railroad Co. are controlled through the New England Navigation Co. 
(a holding company), all of whose capital stock of $53,000,000 is 
owned by the New York, New Haven & Hartford Railroad Co. Until 
July 1, 1912, the New England Navigation Co. was both a holding 
and operating company for nearly all of the New Haven system’s 
marine interests, but in that year the company transferred its vessels 
to the New England Steamship Co., thus becoming strictly a holding 
company. The navigation companies now controlled by the New 
York, New Haven & Hartford Railroad Co. through the New Eng¬ 
land Navigation Co. or other subsidiaries, as indicated by the dia¬ 
gram, are the following: 

(I) The New England Steamship Go. —This company was 
incorporated on May 20, 1907, and at present operates 31 steamers 
and other‘vessels with a total of 75,306 gross tons. All of its capital 
stock of $6,000,000 and bonds and notes of $9,100,000 are owned by 
the New England Navigation Co. It operates nine lines, six of which 
connect New York with New England points and three of which are 
local. Some of these lines at one time were operated by separate 
corporations, but have since been dissolved. 

(£) New Bedford,^ Marthas Vineyard Nantucket Steam¬ 
boat Go. —This company represents a consolidation of the New Bed¬ 
ford, Martha’s Vineyard & Nantucket Steamboat Co. and the Nan¬ 
tucket & Cape Cod Steamboat Co. All of the company’s stgck of 

is owned by the New England Navigation Co., and its 
regular service is the only one between the ports indicated on the 
diagram. 

(J) The Hartford (& New York Transportation Go. —This 
company was acquired by the New York, New Haven & Hart¬ 
ford Railroad Co. in 1906, and all of the company’s $6,703,000 of 
stock is now owned by the New England Navigation Co. or affiliated 
concerns. The extent of its marine interests and the routes covered 
are indicated on the diagram following this page. 


374 


AFFILIATIONS ON THE ATLANTIC AND GULF COASTS. 


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AFFILIATIONS ON THE ATLANTIC AND GULF COASTS. 375 

(4) Merchants (& Miners'* * Transportation Co. —Since its es¬ 
tablishment in 1854 this company acquired by purchase the Balti¬ 
more & Savannah Steamship Co. in 1876 (now inactive), the Mer¬ 
chants’ Steam Lighter Co. in 1903, and the Boston & Philadelphia 
Steamship Co. in 1907 (now inactive). According to the testimony 
of Mr. Edward G. Buckland, vice president of the New York, New 
Haven & Hartford Railroad Co. and the New England Steamship 
Co. (vol. 2, p. 1052), the New York, New Haven & Hartford Rail¬ 
road Co., indirectly or directly, owns, subject to a voting trust agree¬ 
ment, $2,531,700 of the $5,000,000 of the Merchants & Miners’ Trans¬ 
portation Co.’s stock, or 317 shares more than 50 per cent. This trust 
agreement, dated March 21, 1907, and made between the New Eng¬ 
land Navigation Co. and Nathaniel W. James, and such other stock¬ 
holders of the Merchants & Miners’ Co. as might become parties 
thereto,^ provides that 75 per cent of the common stock of the com¬ 
pany be put in trust for a period of 25 years. Under the agreement 
the New England Navigation Co. and the independent stockholders 
can each nominate only four directors, and the eight thus selected are 
empowered to select an additional director; but in case of failure to 
do so, the selection of the ninth director rests with the Safe Deposit 
& Trust Co. of Baltimore, the trustee under the agreement. Accord¬ 
ing to Mr. Daniel H. Hayne,^ general solicitor of the Merchants & 
Miners’ Transportation Co., the agreement was occasioned by the 
necessity on the part of the Merchants & Miners’ Co. of securing finan¬ 
cial aid in 1906 and the reluctance of private capital to assume the 
financial risks attending our merchant marine at that time. “ In this 
dilemma,” he explained— 

the Merchants & Miners’ Transportation Co., which had remained one of the 
few independent steamship lines on the coast, found that it was necessary to 
secure strong interests to weather the storm. 

Appeal was made to the various railroad connections of this company to 
take some interest in the minority stock of the company. This request was re¬ 
fused. Mr. Morse at that time was quite active in endeavoring to establish a 
consolidation of the coastwise lines. This company did not look with favor 
upon such a combination. Private capital was reluctant to take any further 

1 For a full copy of the trust agreement, see vol. 2 of the Committee’s Proceedings, 

pp. 1052—1055. ^ 

* For a full copy of Mr. Hayne’s statement submitted to the Committee, see vol. 2 of 

the Committee’s Proceedings, pp. 1314—1316. 




376 AFFILIATIONS ON THE ATLANTIC AND GULF COASTS. 

risk, and the proposition was placed before the New York, New Haven & Hart¬ 
ford Railroad Co. That company offered to purchase 50 per cent of the stock 
of this company. (Vol. 2, p. 1315.) 

At the particular time referred to by Mr. Hayne large blocks of 
stock in the Merchants & Miners’ Transportation Co. were held by a 
few families who had been identified with the management of the 
company, and upon the death of the former holders were held in 
trust by the Safe Deposit & Trust Co. of Baltimore. It was felt 
that the proper protection of the trust estates required the retention 
of the control of the company in the hands of the present owners with 
a view to preventing the stock from drifting into a minority interest. 
The accomplishment of this purpose gave rise to the aforementioned 
trust agreement, which secured the control of the company for 25 
years and gave the present owners the majority of the board of di¬ 
rectors, thus protecting “ the trust estates which were being conducted 
by the same trustee that is named in the trust agreement.” To quote 
Mr. Hayne’s testimony (vol. 2, p. 1315) : 

The agreement preserved the management of the company in the same hands 
that had always managed it, with its personnel and executive officers, and it 
was felt that the company was safer and more independent in this way than 
if the stock was free on the market to be purchased by whomsoever desired to 
purchase it. This arrangement has preserved to the former owners of the Mer¬ 
chants & Miners’ Transportation Co. an absolute independence free of any 
dictation of the New York, New Haven & Hartford Railroad Co. or the New 
England Navigation Co., through which the said railroad company owns the 
said stock of the Merchants & Miners’ Transportation Co. This company is as 
free and independent in its management as though the New York, New Haven 
& Hartford Railroad Co. did not own a dollar of its stock, and it has always 
exercised that independence. 

While the New England Navigation Co. was the medium through 
which the New York, New Haven & Hartford Eailroad Co. pur¬ 
chased 50 per cent of the stock interest in the Merchants & Miners’ 
Co., the railroad company has purchased 317 additional shares of the 
trust certificates. At present the New York, New Haven & Hartford 
Eailroad Co. interests control only 24,000 shares of the 47,366 shares 
of trust stock, and it is argued that there can be no control until 
the New Haven interests secure 75 per cent of the entire trust stock 
(35,525 shares). While Mr. Buckland admitted that additional pur- 


AFFILIATIONS ON THE ATLANTIC AND GULF COASTS. 377 

chases up to the 75 per cent limit might be made at any time, he 
emphasized the fact that the New York, New Haven & Hartford 
Railroad Co. interests have always regarded the Merchants & Miners’ 
Co. as an extension of the railroad system rather than a competitor 
(vol. 2, p. 1055). On the other hand, it may be considered doubtful, 
despite the apparent (possibly nominal) independence of the com- . 
pany by virtue of the trust agreement, whether any policy would 
be adopted objectionable to the New York, New Haven & Hartford 
Railroad Co., since it is the majority stockholder. If this assumption 
is correct, it would also appear that the acquisition of this important 
all-water line, connecting Philadelphia, Baltimore, Newport News, 
Norfolk, and Savannah with Boston and Providence, has greatly 
strengthened the New Haven system in the traffic between southern 
ports and New England. 

(6) Maine Central Railroad Co.^s steamers .—The Maine 
Central Railroad Co., controlled by the New York, New Haven & 
Hartford Railroad Co., through the Boston & Maine Railroad Co., 
owns six steamers operating between a large number of the smaller 
ports of Maine. (See diagram.) These steamers are operated by 
the railroad company, and are not separately incorporated. 

Many of the aforementioned steamship lines of the New York, 
New Haven & Hartford Railroad Co., especially the Long Island 
Sound lines, it should be stated, were originally acquired by various 
independent railroad companies as feeders, and became the property 
of the New York, New Haven & Hartford Railroad Co. when these 
railway lines were consolidated into the New Haven system. More¬ 
over, judging from Mr. E. G. Buckland’s testimony (vol. 2, 1034- 
1035), the New York, New Haven & Hartford Railroad Co. acquired 
the Sound lines for the accommodation of those New England 
shippers who might— 

prefer in many instances to ship their high-grade goods by water rather than 
by rail, because in shipping them by water they have the choice of several 
terminal deliveries in the lower part of Manhattan Island. The goods are 
practically sure to be on the dock ready for their consignees early the follow¬ 
ing morning, whereas if they are sent by rail there is a possibility that they may 
be held up in the rail terminals on the north side of the Harlem River, neces¬ 
sitating an additional floatage of cars from these terminals down to the New 
Haven terminals in the lower part of Manhattan Island before they are ready 
for delivery. ♦ ♦ ♦ By virtue of owning various Sound lines and having 


378 AFFILIATIONS ON THE ATLANTIC AND GULP COASTS. 


various terminals in New York City, we are able to give to shippers the 
delivery in New York City, which is the all-important thing in trading with 
New York. The fact that New York City happens to be one name does not 
by any means mean that it is only one city. It is a group of industries 
variously situated, and it is necessary, if transportation is to be properly han¬ 
dled, that commodities should be delivered as near as possible to the location of 
the industries which deal in them; as near to that industry and as promptly 
as possible in order to save delay and cartage. In other words, transportation 
to New York City to-day has become a question of deliveries, of deliveries in 
localities, and this is seen from an examination of the terminal map of New 
York City, entitled “ Freight Terminals, New York, New Haven & Hartford 
Railroad Co., in New York, Brooklyn, and Jersey City.” 

In order to get proper deliveries in New York City we must acquire and hold 
piers practically surrounding the entire business part of Manhattan Island. In 
addition to that we have certain piers in Brooklyn, and we have rights of 
delivery at various terminals on the Brooklyn side of the river. 

The Eastern Steamship Corporation .—This company, the second 
important consolidation of New England navigation lines, has out¬ 
standing $3,000,000 of preferred stock, $3,075,000 of common stock, 
and $10,068,100 of bonds and notes, and operates in the coastwise 
trade 29 steamships, with a combined tonnage of 54,771 gross tons. 
In 1912 the corporation acquired (1) all the property of the Eastern 
Steamship Co. (formerly controlled by the New York, New Haven 
& Hartford Eailroad Co. and representing 20 steamers of 25,520 gross 
tons), operating between New York and Boston and Maine ports; 
(2) the Maine Steamship Co. (formerly controlled by the New York, 
New Haven & Hartford Eailroad Co. and operating 3 steamers of 
10,470 gross tons between New York and Portland, Me.); (3) all 
the property of the Metropolitan Steamship Co., operating 6 freight 
steamers of 18,721 gross tons between Boston and New York; and (4) 
all of the capital stock of the Boston & Yarmouth Steamship Co. 
(Ltd.) (acquired from the Canadian Pacific Eailway Co.), operating 
3 steamers of 5,774 gross tons between Boston and Yarmouth, Nova 
Scotia. At present the corporation operates 9 lines, as follows: 

Metropolitan Steamship Line (Boston and New York). 

Maine Steamship Line (New York and Portland). 

Boston & Portland Line (Boston and Portland). 

Kennebec Line (Boston and Augusta,Me.,and intermediate points). 

Bangor Line (Boston and Bangor, Me., and intermediate points). 


AFFILIATIONS ON THE ATLANTIC AND GULF COASTS. 379 

International Line (direct service between Boston and St. John, 
New Brunswick). (Coastwise service between Boston and St. John 
and intermediate points.) 

Portland & Rockland Line (Rockland and Portland). 

Boothbay Line (Boothbay and Bath, Me., stopping at some 20 
different landings). 

Mount Desert & Blue Hill Line (Bar Harbor Line—Rockland to 
Bar Harbor; Blue Hill Line—Rockland to Blue Hill; Sedgwick 
Line—Rock Island to Sedgwick). 

Afjiliations of the Eastern Steamship Gorporation with other navi¬ 
gation interests. —When the Eastern Steamship Corporation acquired 
the aforementioned marine interests of the New England Navigation 
Co. the purchase price was arranged on the basis of $1,000 par value 
of the Eastern Steamship Corporation’s common stock for each 20 
shares of Eastern Steamship Co.’s stock ($2,000 par value), $1,000 
par value of the Eastern Steamship Corporation’s preferred stock, 
and $1,000 of its 5 per cent first-mortgage bonds. Accordingly, the 
New England Navigation Co. (owned by the New York, New Haven 
& Hartford Railroad Co.) is now the owner of the Eastern Steamship 
Corporation’s securities to the extent of 20,000 shares of the 76,500 
shares of common stock, 15,000 shares, or 50 per cent, of the preferred 
stock, and $2,500,000 of the $5,700,000 of 5 per cent first-mortgage 
bonds. (Vol. 2, p. 1082.) These securities, Mr. E. G. Euckland testi¬ 
fied, were taken by the New York, New Haven & Hartford Railroad 
Co. because it could not obtain any other consideration for the prop¬ 
erty sold, and are now in the company’s treasury for sale at the price 
paid for them. (Vol. 2, p. 1051.) Despite this large ownership of the 
Eastern Steamship Corporation’s securities by the New England 
Navigation Co., both Mr. Calvin Austin, president of the Eastern 
Steamship Corporation, and Mr. Buckland testified that the New 
Nork, New Haven & Hartford Railroad Co. interests “have never in¬ 
terfered directly or indirectly or attempted to interfere with the man¬ 
agement of the Eastern Steamship Corporation”; that the New 
York, New Haven & Hartford Railroad Co. interests have “neither 
the actual nor the potential control of the company,” there being 
no officers and directors in common with reference to the two 
interests; and that the two interests are operated entirely independ¬ 
ently. (Vol. 2, pp. 1051,1083.) The New York, New Haven & Hart¬ 
ford Railroad Co. and the Eastern Steamship Corporation, how- 


380 AFFILIATIONS ON THE ATLANTIC AND GULF COASTS. 

ever, are on friendly terms with each other, and there has been no 
change in the relations between^ the comjDanies since the Eastern 
Steamship Corporation acquired the aforementioned marine interests 
of the New England Navigation Co. (Vol. 2, p. 1083.) Mr. Charles 
S. Mellen, at the time president of the New York, New Haven & 
Hartford Railroad Co., stated that there is a working arrangement 
between the two corporations to-day which is the same as existed 
prior to the sale of the New Haven’s marine interests to the Eastern 
Steamship Corporation, and that the two companies are operating on 
friendly terms. 

Four of the directors of the Eastern Steamship Corporation, own¬ 
ing personally or through their firms a large amount of the com¬ 
pany’s stock, were also reported to the committee as being directors 
(including the president and vice president of the Atlantic, Gulf & 
West Indies) of the Atlantic, Gulf & West Indies Steamship Lines 
(usually designated as the “A. G. W. I.” and to be referred to later), 
the largest shipping consolidation in the Middle Atlantic and Gulf 
coastwise trades. Mr. Austin testified that there is no community 
of interest between the two consolidations, except as indicated by the 
common directors; that the two corporations act in harmony, one 
being an extension of the other and there being no competition 
between them; and that the two companies interchange traffic, the 
Eastern Steamship .Corporation giving freight to the A. G. W. I. to 
take South and the A. G. W. I. furnishing the Eastern Steamship Cor¬ 
poration freight at New York to take to Boston. (Vol. 2, p. 1085.) 

The dominant ^position of the New York^ New Haven cfi Hartford 
Railroad Co. and the Eastern Steamship Corporation. —Compared 
with the total gross tonnage of the lines operating in the strictly 
New England coastwise trade, including New York (but exclusive 
of tramp vessels and coal barges), the above-mentioned two con¬ 
solidations represent 77 out of a total of 100 steamers and a gross 
tonnage of 143,710 tons out of a total of 162,956 tons, or over 88 per 
cent. Of the above totals, the New York, New Haven & Hartford 
Railroad group represents 48 steamers of 88,939 gross tons, the East¬ 
ern Steamship Corporation 29 steamers of 54,771 gross tons, and 
the independent lines only 23 steamers of 19,246 gross tons.^ Only 

1 The foregoing figures do not take into account the Merchants & Miners Transporta¬ 
tion Co., the Clyde Steamship Co., and the Ocean Steamship Co., which only connect 
New England ports with ports south of New York. 



AFFILIATIONS ON THE ATLANTIC AND GULF COASTS. 381 


nine independent New England lines have been reported to the com¬ 
mittee, viz: 


Name. 


Route. 


Colonial Navigation Co-New York and Providence, with no inter¬ 

mediate stops. 

Norwich & New York Propeller Co. New York and New London. 

(Chelsea Line.) 

Central Vermont Transportation Co. New York and New London. 

(controlled by Grand Trunk Ry. Co.) 

Starin Line---New York and New Haven. 

Montauk Steamboat Co-New York, Sag Harbor, and Block 

Island, stopping at intermediate points. 
Providence, Fall River & Newport Providence, Fall River, and Newport. 
Steamboat Co. 

Maine Coast Co-New York and Portland and other Maine 

coast points. 


The dominant position of the New York, New Haven & Hartford 
Railroad and Eastern Steamship Corporation groups of lines can 
also be inferred by taking into account the large number of New Eng¬ 
land routes which they have entirely to themselves. In the first 
place, it should be noted that in no case do the routes of the many 
lines of the New York, New Haven & Hartford Railroad conflict 
with the nine routes of the Eastern Steamship Corporation, and as 
Mr. Austin testified, there is no competition between his company and 
the New Haven’s water lines (vol. 2, p. 1084). He further testified 
that north of Boston the Eastern Steamship Corporation has as a 
competitor only one small line, the Maine Coast Co.; that this line 
owns but two steamers (with a total of 899 gross tons) worth only 
a few thousand dollars apiece, and which, in opposition to his com¬ 
pany’s $550,000 to $650,000 steamers, do not constitute “ very much 
of a competitive factor.” (Vol. 2, p. 1083.) Exclusive of a few 
very small and purely local lines, Mr. Buckland enumerated (vol. 
2, pp. 1046-1050) only five independent lines as competitors of the 
New York, New Haven & Hartford Railroad’s water lines, viz, the 
Starin Line, between New York and New Haven; the Chelsea & 
- Central Vermont Transportation Lines, between New York and New 
London; the Colonial Line, between New York and Providence; and 
the Montauk Steamboat Co. (controlled by the Pennsylvania Rail¬ 
road), between New York, Sag Harbor, and Block Island. The Cen¬ 
tral Vermont Transportation Co., however, reported to the committee 






382 


AFFILIATIONS ON THE ATLANTIC AND GULF COASTS. 


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AFFILIATIONS ON THE ATLANTIC AND GULF COASTS. 383 

that it “ encounters no competition from other water carriers,” and 
that it “ does no business except for the Central Vermont Railway Co. 
under a verbal contract to handle freight billed by said railway com¬ 
pany under its tariff from New York to New London and from 

New London to New York at a stipulated rate per hundred pounds 
each way.” 

The Middle and South Atlantic Coast Trade. 

Enumeration of regular line services in the trade. —In this im¬ 
portant trade two facts stand out preeminently, namely, (1) that 
on nearly all the principal routes there is only one regular steamship 
service, and (2) that practically all the large lines doing a regular 
through line business are either controlled by railroads or have been 
acquired by the Atlantic, Gulf & West Indies Steamship Lines. At 
the beginning of 1913, 11 lines ^ connected the leading ports of this 
division of our coastwise trade, and the diagram on the opposite page 
shows that of the 27 routes there indicated (including all of any im¬ 
portance in the trade), only three are served directly by more than 
one regular steamship line. It also appears that of the 96 vessels and 
the total gross tonnage of 232,385 gross tons of the aforementioned 
11 lines, the railroad-owned lines control over 61 per cent and 67 
per cent, respectively, and the Atlantic, Gulf & West Indies Steam¬ 
ship Lines 25 per cent and 26.4 per cent. 

The Atlantic.^ Gulf <& West Indies Steamship Lines. —Follow¬ 
ing the collapse of the Consolidated Steamship Lines ^ (oom- 


' These 11 lines are the following: 


Namt of lines. 

Number of 
steamers. 

Gross 

tonnage. 

Railroad-owned Lines; 

Old Dominion Steamship Co. 

14 

27,330 
43,484 
65,708 
8,281 
11,806 

55,049 

6,207 

4,003 

2,392 

4,006 

4,119 

OrAan StflaTnship Co. 

9 

Merchants & Miners Transportation Co. 

26 

4 

Baltimore Steam Packet Co...... 

5 

CLiAs^pAfllrfl RtAamship Co... 

5 

A. G. W. I. coastwise lines: 

Clyde Steamship Co. 

21 

Rnnt.hp.m RtAamship Cn_.. 

3 

Other lines: 

New York &. Baltimore Transportation Co. 

4 

Baltimore & Philadelphia Steamship Co. 

4 

PhilflHelnhia Ar Cnlf Steamship Co.... 

2 

Baltimore & Carolina Steamship Co. 

3 




* This consolidation consisted of the Eastern Steamship Co., Metropolitan Steamship 
Co., Clyde Steamship Co., Mallory Steamship Co., New York & Cuba Mai! Steamship Co., 
and New York & Porto Rico Steamship Co. 





















384 AFFILIATIONS ON THE ATLANTIC AND GULP COASTS. 


SUBSIDIARIES OF THE ATLANTIC, GULF & WEST INDIES STEAMSHIP 

LINES. 


1. Clyde Steamsliip Co. (21 ves- 

eels of 55,049 gross tons). 

A. G. W. I. owns $13,814,- 
800, or 99 per cent of the 
company’s stock. 

2, Mallory Steamship Co. (13 

vessels of 46,609 gross 
tons). A. G. W. I. owns 
$13,781,500, or 98 per cent 
of the company’s stock. 

‘Owns stock in— ^ 

Compania Mexicana de Nav- 
igacion, Mexico. 
Compania Maritima Cu- 
bana, Cuba. 

"Vapores de Gonzales, Cuba. 
Compania de Sanchez y Re- 
molcadores, Cuba. 


3. New York & Cuba Mail 
Steamship Co. (17 vessels 
of 68,776 gross tons). A. 
G. W. I. owns $19,793,600,' 
or 99 per cei of the com¬ 
pany’s stock. 


4. 


Atlantic, Gulf & West 
Indies steamship 
lines. 


5. 


6 . 


7. 


New York & Porto Rico 
Steamship Co. of Maine 
(13 vessels of 37,147 gross 
tons). A. G. W. I. owns 
$8,000,000, or 100 per cent 
of the company’s stock. 


Owns all of the stock of— 
New York & Porto Rico 
Steamship Co., of New 
' York. 

United States & Porto Rico 
Navigation Co. 


Southern Steamship Co. (3 
vessels of 6,207 gross tons). 
A. G. W. I. owns $90,000, 
or 100 per cent of the com¬ 
pany’s stock. 

Texas City Steamship Co. 
(5 vessels of 13,335 gross 
tons). A. G. W. I. owns 
$200,000, or 100 per cent 
of the company’s stock. 
The vessels are owned di¬ 
rectly by the A. G. W. I. 
and leased to the operat¬ 
ing company. 

In addition to the above 
lines, the A. G. W. I. con¬ 
trols^ through stock own¬ 
ership, the San Antonio 
Co. (which owns all of the 
stock of the San Antonio 
Docking Co.),Carolina Ter¬ 
minal Co., Clyde Steam¬ 
ship Terminal Co., Santi¬ 
ago Terminal Co., Jackson¬ 
ville Lighterage Co., and 
the Tampa Towing & 
Lighterage Co. 







AFFILIATIONS ON THE ATLANTIC AND GULF COASTS. 385 

monly known as the Morse Combination), a plan of reorganization 
was adopted whereby the two New England companies in the com¬ 
bination—the Eastern Steamship Co. and the Metropolitan Steam¬ 
ship Co.—were organized into the Eastern Steamship Corporation, 
and the four southern companies of the combination—the Clyde, 
Mallory, New York & Cuba Mail, and New York & Porto Rico 
Steamship Cos.—into a new consolidation called the Atlantic, Gulf 
& West Indies Steamship Lines, and commonly designated as the 
“A. G. W. I.” lines. As already pointed out in connection with the 
discussion of the New England coastwise trade, the Eastern Steam¬ 
ship Corporation and the Atlantic, Gulf & West Indies Steamship 
Lines have four directors in common, are not competitors but only 
an extension of each other’s lines, and interchange traffic (p. 380). 

The Atlantic, Gulf & West Indies Steamship Lines has outstand¬ 
ing $14,996,400 of common stock, $14,997,000 of preferred stock, 
and $12,997,000 of bonds, and controls through stock ownership, in 
addition to numerous minor marine interests, six important steam¬ 
ship lines, viz, the Mallory and Texas City Steamship Cos., engaging 
in the Atlantic-Gulf coastwise trade; the Clyde Steamship Co., 
operating in the Atlantic coastwise trade and in the New York-Santo 
Domingan trade; the Southern Steamship Co., operating in the 
Atlantic coastwise trade and extending its service to Key West and 
Tampa; the New York & Porto Rico Steamship Co., engaging in 
the New York-Porto Rican and New Orleans-Porto Rican trade; 
and the New York & Cuba Mail Steamship Co., operating in the 
New York-Cuban and New York-Mexican trade. (For the extent 
of the marine interests of these companies and the extent to which 
their stock is owned by the Atlantic, Gulf & West Indies Steamship 
Lines see the outline on the opposite page.) In the aggregate these 
lines represent 72 steamers of 227,123 gross tons, thus constituting, 
next to the New York, New Haven & Hartford Railroad system, the 
largest consolidation of domestic steamship lines on the Atlantic 
coast. 

The Southern Steamship and Texas City Steamship Cos., it may 
be added, were acquired subsequent to the organization of the com¬ 
bination, the last-named line after a severe rate war in the New 
York-Galveston trade between the old Texas City Steamship Co. 
(affiliated with the Brunswick: Steamship Co.) and the Morgan & 
Mallory Lines, during which the regular rates were at one time 
25655°— VOL 4—14-25 



386 AFFILIATIONS ON THE ATLANTIC AND GULF COASTS. 

cut 70 per cent in the case of boots and shoes, dry goods, carpets, 
and clothing, 66 per cent on canned goods, 80 per cent on salt, and 
from 85 to 90 per cent in the case of wire nails and iron articles. 
Following this rate war the Brunswick Steamship Co. was placed 
in the hands of a receiver (1909), the old Texas City Steamship Co. 
ceased operations, and a new Texas City Steamship Co. was organ¬ 
ized. All the capital stock of this new company was purchased by 
the Atlantic, Gulf & West Indies Steamship Lines on August 6, 1910. 

Railroad-owned lines .—Five of the 11 lines (enumerated on p. 383) 
which operate between ports on the Middle and South Atlantic coast 
are controlled by railroads. The importance of these railroad- 
controlled lines becomes apparent when it is stated that they oper¬ 
ate 59 steamers of 156,609 gross tons, compared with 37 steamers of 
75,776 gross tons for the remaining six lines. The railroad-owned 
lines and the two “A. G. W. I.” lines (Clyde & Southern Steamship 
Cos.)^ combined represent a total of 83 steamers of 217,865 gross 
tons, or over 86 per cent of the total number of vessels, and nearly 
94 per cent of the total gross tonnage of all the regular lines engaged 
in the trade under consideration. 

Since none of the southern or southeastern railroads extends north 
of the Potomac, these rail lines effected a joint rail-and-water route 
between North Atlantic ports and the South and Southwest by ob¬ 
taining control of important steamship lines through stock owner¬ 
ship. These water lines not only give the southern railroads a large 
through traffic between the northern ports of Boston and New York 
and the southern ports of Baltimore, Norfolk, and Savannah, but 
also a differential route via the Virginia ports between Chicago and 
New York. In some instances the boat lines are controlled by a 
single railroad, whereas in other cases the majority of the stock is 
owned by several rail lines. Briefly outlined the railroad-owned 
lines are the following: 

The Old Dominion Steamship Co..^ $864,900 of whose capital 
stock of $1,500,000 is owned by five railroad companies, the Atlantic 
Coast Line Eailroad Co. holding $120,000, the Chesapeake & Ohio 
Railway Co. $120,000, the Norfolk & Western Railway Co. $210,000, 
the Southern Railway Co. $205,000, and the Seaboard Air Line Rail¬ 
way $209,900. The company owns $104,744, or 98 per cent, of the 

‘As previously shown, all the other A. G. W. I. lines operate in the Atlantic-Gulf, 
Porto Eican, West Indian, and Mexican trades. 



AFFILIATIONS ON THE ATLANTIC AND GULF COASTS. 387 

stock of the Virginia Navigation Co., which the Old Dominion Line 
reported to the committee “ competes with us for traffic between Rich¬ 
mond and Newport News, Norfolk, and Portsmouth, and which con¬ 
tinues to operate a scale of rates differentially less than those of the 
Old Dominion Line.” The company’s fleet consists of 14 steamers of 
27,330 gross tons and is the only line operating directly between Nor¬ 
folk and New York. Three of its steamers were leased during 1912 
from the “A. G. W. I.” and Southern Pacific Co. 

The Ocean Steamship Go, of Savanimh^ $1,999,200 of whose 
capital stock of $2,000,000 is owned by the Central of Georgia Rail¬ 
way Co., controlled by the Illinois Central Railroad Co., about 20 per 
cent of whose stock in turn is owned by the Union Pacific Railroad 
Co. Its fleet consists^ of nine steamers of 43,484 gross tons, and it is 
the only line operating directly between Boston and Savannah and 
New York and Savannah. 

The Chesapeake Steamship Go.^ $199,700 of whose $600,000 
of capital stock is owned by the Atlantic Coast Line Railroad Co. 
and $399,500 by the Central Trust Co. as trustee for the Southern 
Railway Co. These two railroad companies also own all ($454,800) 
of the company’s income certificates of indebtedness. The company’s 
fleet consists of five steamers of 11,806 gross tons, operating between 
Baltimore and Norfolk. On this route the company competes with the 
Baltimore Steam Packet Co. and the Merchants & Miners Transporta¬ 
tion Co., but a comparison of the printed tariffs shows the published 
port-to-port rates of the three lines for this route to be the same. 

The Baltimore Steam Packet Go,^ all of whose capital stock 
of $400,000 is owned by the Seaboard Air Line Railway. Its fleet of 
five steamers of 8,281 gross tons operates between Baltimore and Nor¬ 
folk and most of its business is through traffic between Baltimore and 
points in the West and South. 

Merchants & Miners Transportation Go,^ owning a fleet of 
26 steamers of 65,708 gross tons. Besides connecting New England 
with New York, Philadelphia, Baltimore, and Norfolk, this line also 
connects Philadelphia and Baltimore with Norfolk, Savannah, and 
Jacksonville. With the exception of the routes between Philadelphia 
and Jacksonville, over which the Southern Steamship Co. operates, 
and between Baltimore and Norfolk, over which the Baltimore Steam 
Packet and Chesapeake Steamship Cos. also operate, this line is the 
only one connecting directly all the other routes assigned to it 


388 AFFILIATIONS ON THE ATLANTIC AND GULF COASTS. 


(p. 382). As previously shown, slightly over one-half of its capital 
stock of $5,000,000 is owned by the New York, New Haven & Hart¬ 
ford Railroad interests, although the voting power is lodged with the 
Safe Deposit & Trust Co. of Baltimore. 

Peninsular and Occidental Steamship Co.^ which operates 
three steamers of 4,303 gross tons and which is the successor to the 
Plant Line and the Florida East Coast Steamship Co. The company’s 
business is either local or foreign (between Port Tampa and Key 
West, Fla., and Havana, and between Miami, Fla., and Nassau, 
Bahama Islands) and is mentioned here because the Atlantic Coast 
Line Railroad Co. and the Florida East Coast Railway Co., own, 
respectively, $750,000 and $748,000 of its capital stock of $1,500,000. 
These two railroads also own all of the company’s funded indebted¬ 
ness of $1,500,000. 

Lines not controlled hy railroads or hy the Atlantic Gulf & West 
Indies Steamship Lines. —Outside of the railroad and “A. G. W. I.” 
groups of lines only four independent lines, with a combined total 
of only 13 steamers of 14,520 gross tons, operate in the middle and 
south Atlantic coastwise trade. These lines are the New York & 
Baltimore Transportation Line, with a service between New York and 
Baltimore; the Baltimore & Philadelphia Steamship Co., between 
Philadelphia and Baltimore; the Baltimore & Carolina Steamship 
Co., between Baltimore and Charleston and Georgetown; and the 
Philadelphia & Gulf Steamship Co., between Philadelphia and 
Giarleston. Of these lines the first three are the only ones directly 
connecting the ports they serve, while the Philadelphia & Gulf Line’s 
route between Philadelphia and Charleston is also served by the 
Southern Steamship Co. The New York & Baltimore Transportation 
Line reported to the committee that a number of transportation com¬ 
panies have refused to enter into a through proportional tariff with 
it ^ without in any instance furnishing a reason; and the Baltimore & 

1 The New York & Baltimore Transportation Line reported the following : 

“ The New York Central refused to join in a through tariff between Baltimore and 
New York State points reached by them. The Baltimore & Ohio Railroad took under 
consideration a proposition to establish through rates from New York to western points, 
but rejected it. 

“ The New York, New Haven & Hartford Railroad refused to pro rate to or from any 
of its stations. The New England Navigation Co. (a subsidiary of the New York, New 
Haven & Hartford Railroad) has in effect a projportional tariff in connection with water 
lines operating to Norfolk and all ports south which they have several times refused to 
give us the benefit of. 

“ The Metropolitan Steamship Co., also a subsidiary of the New York, New Haven & 
Hartford Railroad Co., has several times refused to give us the benefit of a proportional 
tariff between New York and Boston which they do give to lines operating to more 
southerly ports,” 




AFFILIATIONS ON THE ATLANTIC AND GULF COASTS. 389 

Carolina Steamship Co. reported that the Atlantic Coast Line Rail¬ 
road refused to prorate with it north of Charleston and north, south, 
and west of Lanes, S. C.; and the Seaboard Air Line as regards all 
points. According to the reports filed by the lines, they take the 
following differentials under the all-rail rates: one cent per hundred 
pounds (reduced from 2 cents to 1 cent on the first three classes of 
freight in 1912) between Philadelphia and Baltimore by the Balti¬ 
more & Philadelphia Steamship Co.; between 4 to 1^ cents on class 
rates and 1 cent on all commodity rates between Baltimore and New 
York by the New York & Baltimore Transportation Line; and be¬ 
tween 14 cents and 2 cents on class rates and 2 cents on commodities 
between Charleston and Baltimore by the Baltimore & Carolina 
Steamship Co. 

The Atlantic Coast-Gulf Coast Trade. 

Enumeration and description of regular-line services .—At the be¬ 
ginning of 1913 regular-line service between Atlantic coast ports and 
Gulf ports was confined to six navigation companies, viz: 

LINES CONNECTING ATLANTIC COAST AND GULF PORTS. 

[Abstracted from answers to the committee’s schedule of inquiries.] 


Name of line. 

Number of 
steamers. 

Gross 

tonnage. 

Route. 

Southern Pacific Atlantic 
Steamship Lines (Morgan 
Line). 

21 

94,536 

New York and New Orleans, 
New York and Galveston. 

Mallory Steamship Co. 

13 

46, 609 

New York and Galveston, call¬ 
ing at Key West, New York 
and Mobile, calling at Key 
West and Tampa. 

Southern Steamship Co. 

3 

6, 207 

Philadelphia and Key West 
and Tampa. 

Texas City Steamship Co. 

5 

13, 335 

New York and Texas City, Tex. 

Seaboard (fe Gulf Steamship 

Co. 

2 

3, 359 

New York and Velasco, Tex., 
calling at Port Arthur. 

Philadelphia & Gull Steam¬ 
ship Co. 

2 

4,066 

Philadelphia and New Orleans. 


Affiliatiens between the lines.—k.^ previously shown, the Mallory, 
Texas City, and Southern Steamship Cos. are subsidiaries of the 

















390 AFFILIATIONS ON THE ATLANTIC AND GULF COASTS. 


Atlantic, Gulf & West Indies Steamship Lines,^ and these lines in 
turn are working in perfect harmony with the Southern Pacific 
Steamship Lines (Morgan Line),’ the other important line in the 
trade. The Mallory Steamship Co. reported to the Committee that 
“We have no agreement with the other companies as to the mainte¬ 
nance or change of rates, but keep ourselves advised of the rates made 
by the other lines engaged in similar services and interchange in¬ 
formation and views with them as to rates ”; while the Texas City 
Steamship Co. reported, “We interchange information as regards 
rates with the Morgan and Mallory Lines.” The close relations ex¬ 
isting between the Morgan and Mallory Lines are fully set forth in 
the following abstract of the testimony of Mr. E. Warfield, vice 
president and general manager of the Seaboard & Gulf Steamship 
Co. and lately connected with the Mallory Line, and Mr. H. H. 
Paymond, vice president and general manager of the Clyde and 
Mallory Lines: 

(Abstract of Mr. E. Warfield’s testimony) : The Morgan and “A. G. W. I.” 
Lines have a very clear understanding among themselves as to each other's 
rights. ♦ ♦ * * j know that while I was associated with the Mallory Line 
we found it to our interest to observe the rights of the Morgan Line, and 
they treated us in about the same way, but there was no joint or dual owner¬ 
ship of the vessels. ♦ * ♦ The understanding was to the effect that we 

did not make any changes in the rates without a conference. * * ♦ There 

were no agreed dates of sailings, but they were well-known dates announced 
beforehand. * ♦ ♦ The regular sailings of the Morgan Line are Tuesdays, 

Thursdays, and Saturdays to Galveston, while the regular sailings of the Mallory 
Line are Wednesdays and Saturdays, with an extra ship on such other dates as 

1 The Atlantic, Gulf & West Indies Steamship Lines owns all the capital stock of the 
Southern Steamship Co. and the Texas City Steamship Co. and $13,781,000 of the 
$14,000,000 of the Mallory Steamship Co.’s stock. 

* In 1884 the Southern Pacific Co. acquired control of the Morgan’s Louisiana & Texas 
R. R. & S. S. Co., and subsequently also secured all the stock of the Cromwell Steam¬ 
ship Co., operating between New York and New Orleans. In 1902 and 1905, respec¬ 
tively, the steamers of these two companies were taken over by the Southern Pacific Co. 
and are now operated directly by it. The Southern Pacific Co. operates two services, 
one via New Orleans, handling chiefly local traffic, and the other via Galveston, handling 
the through business of the Southern Pacific system and the freight destined to Utah 
and Colorado. The entire fleet of the company’s Atlantic steamship lines consists of 23 
vessels of 101,283 gross tons, but two of these vessels (with 6,747 gross tons) are operat¬ 
ing in the New Orleans-Havana trade. Mention should also be made of the Direct Naviga¬ 
tion Co. and the Gulf Steamship Co. The first operates between Houston and Galveston 
and nearly all of its capital stock and bonds are owned by the Morgan’s Louisiana & 
Texas R. R. & S. S. Co. (controlled by the Southern Pacific Co.). Its rates on cotton, 
which is the principal traffic, are exactly the same as those charged by the all-rail route 
from Houston to Galveston. All except $500 of the $100,000 of the Gulf Steamship Co.’s 
stock is owned by the Southern Pacific Co., and as will be shown later, the testimony 
before the committee clearly indicates that this company has recently been used largely 
for competitive purposes with a view to undermining the two independent lines engaged 
tn the Atlantic coast-Gulf coast trade. 



AFFILIATIONS ON THE ATLANTIC AND GULF COASTS. 391 

might be necessary to take care of the business. ♦ ♦ ♦ xhe two lines do not 

for one minute underbid each other in rates, and there is only a friendly, legiti¬ 
mate scrap for the business. (Vol. 2, pp. 1013-1014.) 

(Abstract of Mr. H. H. Raymond’s testimony) ; The two lines charge the same 
rates. ♦ ♦ ♦ Railroad rates are uniform as between competitive points, and 

the shippers expect and require the same thing of the steamship companies for 
a similar service as the railroads give. Therefore we do have conferences to 
the extent of keeping each other informed, but are not necessarily in agree¬ 
ment. * * ♦ I can not say that the rates are adjusted in conference and 

that they are the result of an understanding or agreement, because they are 
not; but proper business dictates to the officer who might be charged with get¬ 
ting the results that the company is entitled to know what his competitor is 
doing. If we lower our rates, the Southern Pacific would lower theirs, and it 
would be the case in the reverse direction. * ♦ ♦ It must be perfectly patent 

to the Committee that if you and I, for illustration, had competitive companies 
from New York to Galveston, and were giving to the public the same service, 
the same facilities, that it would be to your business and my business interests 
to keep informed as to what the rates are. We could not lower and raise 
them at our will. One or the other would surrender. ♦ ♦ * Each company 

informs the other of its rates; if we lower or raise our rate from New York 
to Galveston, we notify the Morgan Line. (Vol. 2, pp. 1159-1162.) 

With the “ A. G. W. I.” Lines and the Morgan Line closely affili¬ 
ated, it follows that at the beginning of 1913 only two small inde¬ 
pendent lines—the Philadelphia and Gulf Steamship Co. and the 
Seaboard and Gulf Steamship Co. (the gross tonnage of whose 
steamers aggregates only 4.4 per cent of the total line tonnage 
engaged in the trade)—connect any of the Atlantic coast ports with 
those of the Gulf. The first line, however, was in the hands of a 
receiver at the time of the Committee’s hearings, while the last line 
operates only three ships and is in the position, as Mr. Warfield testi¬ 
fied, “ of the fly on the dog’s nose, just bothering them.” Mr. War- 
field further asserted that his line would not have been able to outlive 
the competitive methods of the combined lines had it not been for the 
fact that the line was able to secure suitable full northbound cargoes 
of railroad ties, lumber, and sulphur, which paid a good revenue, 
thus enabling the line to carry southbound cargo at about 50, per 
cent less than is charged by the other lines. It should be stated, in 
this connection, that the Seaboard & Gulf Line is closely affiliated 
with the Houston & Brazos Valley Railroad (owning 48 per cent of 
the railroad company’s stock), which is owned by the syndicate 
that controls the sulphur field at the mouth of the Brazos River. 


392 AFFILIATIONS ON THE ATLANTIC AND GULF COASTS. 

This railroad affiliation strongly fortified the Seaboard & Gulf Line 
against the attacks of the larger lines; in fact, the line was organized 
in anticipation of a movement of sulphur so large as to assure it a 
homeward cargo indefinitely and in a quantity sufficient to enable it 
to increase its service. 

Methods adopted hy the established lines in opposing the estab¬ 
lishment and maintenance of independent lines in the trade, —The 
testimony before the committee can leave no doubt that when a given 
trade is almost completely in the hands of a group of strong and well- 
established affiliated lines it is only with the greatest difficulty, if 
at all, that an independent line can fight its way into the trade. 

In probably no division of our domestic trade, unless it be in the 
New York-Porto Kican trade, has competition between rival carriers 
been so bitter as in the Atlantic coast-Gulf coast trade. As shown by 
the testimony of Mr. F. S. Groves, president of the Philadelphia & 
Gulf Steamship Co., and E. Warfield, vice president and general 
manager of the Seaboard & Gulf Steamship Co., the lines which they 
represent encountered bitter opposition in many forms from the 
established lines. The several methods adopted by these lines to 
undermine these two independent companies (the only two at the 
beginning of 1913), as related to the Committee by the aforemen¬ 
tioned two witnesses, may be briefly enumerated as follows: 

(1) By discouraging the flotation of the company’s stock 
among the subscribers by at once placing opposition steamers in the 
trade and circulating the statement that the proposed new line would 
only exist for a short time. (Testimony of F. S. Groves relative to 
the experience of the Philadelphia & Gulf Steamship Co., vol. 2, 
pp. 931, 941.) 

(2) By making it difficult to purchase, build, or charter 
steamers, owing to the few independent owners of steamers on the 
Atlantic coast. Mr. Groves testified that it was only with extreme 
difficulty that he managed to purchase two steamers, and that he 
wag given to understand that the coastwise lines centering in New 
York “ had made a sort of arrangement among themselves, a sort of 
gentlemen’s agreement, that they would neither sell nor charter the 
Philadelphia & Gulf Line any steamers.” He added: 

We could not obtain any other vessels and we only had a service every two 
weeks (sailings from each end every two weeks), which, of course, was not a 
sufficient service to carry the higher classes of freight. We continued with that 


AFFILIATIONS ON THE ATLANTIC AND GULF COASTS. 393 

limited service until we went into the hands of a receiver. ♦ * ♦ If I had 

had two more vessels the entire shipping interests of the United States could 
not have crushed my line. I would have made that line profitable; and all I 
(vanted was the vessels. I did not care about their cutting of rates, because 
I could have made the business. I have been in this business in competition 
with the railroads for 45 years and I have always made good where I had the 
boats. ♦ ♦ ♦ 'JIJ 20 Atlantic coast line interests own all the vessels. You 

can not charter a ship. You can not build a ship nor buy one. How, therefore, 
are you going to develop commerce? Every one of those ports wants local coast¬ 
wise business, and the great majority of the ports are ready to put a certain 
amount of money in at a reasonable price, but they are not willing to do that 
when the price is prohibitive. Financial conditions are absolutely prohibitive, 
but if we had the right to purchase foreign ships we could equip, with the proper 
legislation, all those ports in competition with the present lines. * ♦ * (VoL 
2, pp. 933, 955, 962.) 

After finding it impossible to buy or charter vessels, Mr. Groves 
states that he sought to finance the building cf ships, but found that 
the conditions imposed made that course equally impossible. (Yol. 2, 
p. 953.) Mr. Warfield also expressed his belief that American ship¬ 
yards regard the older steamship companies as being of more value 
to them than a new and smaller line, and would discriminate in favor 
of the well-established lines in the building of vessels on the ground 
that “ they are seeking to get the large orders from the big or older 
lines and do not want to jeopardize the business of these lines by 
taking an order from a new line.” (Yol. 2, p. 998.) 

(3) By the use of “ fighting ships.” Yarious witnesses rep¬ 
resenting independent interests testified to the existence of this prac¬ 
tice in the Atlantic-Gulf trade. Mr. F. S. Groves stated that at 
about the time of the organization of his line the Southern Steamship 
Co., operating between Philadelphia and Tampa, promptly adver¬ 
tised the extension of its service to New Orleans, and through this 
act was instrumental in stopping subscriptions to the stock of the 
Philadelphia & Gulf Line. (Yol. 2, p. 931.) As soon as the Seaboard 
& Gulf Steamship Co. began operating from Baltimore to Texas the 
Mallory and Morgan Lines, although operating no service from Balti¬ 
more to Gulf ports, are said to have put in ships temporarily at that 
port, and to have cut their established rates on fireworks and canned 
goods, for example, from 60 cents and 25 cents per hundred pounds 
to 45 cents and 15 cents. Having three or four sailings a month 
against one for the independent lines, these companies would have 


394 AFFILIATIONS ON THE ATLANTIC AND GULF COASTS. 

obtained nearly all the business had not a sufficient number of mer¬ 
chants held to their agreements to give the Seaboard & Gulf Line a 
fair cargo. (Warfield’s testimony, vol. 2, pp. 1009-1010. Also see 
vol. 2, p. 1243.) 

Another attempt to inaugurate an independent steamship line 
between Port Arthur and Baltimore, in August of 1912, failed after 
the first sailing owing to the same practice. (Testimony of H. S. 
L’Hommedieu, traffic manager of the Beaumont Chamber of Com¬ 
merce, vol. 2, pp. 1146-1148.) Working on the theory that Balti¬ 
more canned goods could be shipped at a profit of 20 cents by direct 
sailings from Baltimore to Port Arthur, and charging the Texas 
Kail way Commission’s rate from Port Arthur to points of destination 
in Texas and Louisiana, as against the through rate of 33 cents from 
Baltimore to Houston and Beaumont via the port of New York, 
various Beaumont citizens chartered a steamer for this traffic, and a 
full cargo was promptly secured at the 20-cent rate. In the mean¬ 
time the Southern Pacific interests, having inaugurated the Gulf 
Steamship Co., immediately announced that the rate from Baltimore 
to Galveston by direct sailing would be 15 cents* on canned goods, 
with the result that practically all the cargo for the independent 
venture was canceled. (Vol. 2, pp. 1146-1147.) It was the contention 
of nearly all the witnesses representing independent shipping or com¬ 
mercial interests in the trade that a small independent concern, un¬ 
less supported by contracts with large shippers who would agree to 
stand by the line, can not operate between the Gulf and North 
Atlantic ports under present conditions, especially since the combina¬ 
tion lines can crush any independent venture by putting in steamers 
to fight the competition or by having their regular boats cut rates 
to an unremunerative basis. 

(4) By engaging persons in the employ of an independent 
line to divulge information, and especially to furnish copies of its 
manifests which would reveal the name of shippers and consignees, 
the commodities shipped, the volume of freight handled, and the 
rates obtained. With this knowledge at hand, the well-established 
line can follow up the business, and by special arrangements or 
otherwise induce shippers to cease patronizing the independent car¬ 
rier. (Testimony of F. S. Groves, vol. 2, pp. 934-943.) 


affiliations on the ATLANTIC AND GULF COASTS. 395 

(6) By bringing influence to bear on insurance companies 
whereby the independent line receives a less favorable rate than its 
large and well-established competitors, thus forcing the independent 
carrier to equalize the extra cost of insurance in its rates to shippers. 
Such influence, it was testified, was brought to bear against the 
Philadelphia & Gulf Line, the insurance companies having issued 
circulars to their customers—the large manufacturing and shipping 
interests—which showed that their floaters (an insurance policy ap¬ 
plicable to any line of steamers on which the goods happened to 
move) would not apply on vessels owned by the Philadelphia & Gulf 
Line. Mr. F. S. Groves characterized this obstacle as a “ knock-down 
blow that practically eliminated our cotton shipments, and which, 
since we had to pay in many instances as high as 70 cents insurance to 
get goods as against the 15 cents of the Southern Pacific Co., 
eventually drove most of that business and nearly all the high-class 
freight away from us.” (Vol. 2, p. 941.) He added that insurance 
was subsequently obtained on an equitable basis from two of the larg¬ 
est marine insurance companies; that the underwriters placed the in¬ 
surance embargo upon his line through pressure and not voluntarily; 
and that the object of the opposing lines in bringing such pressure 
to bear was to keep his line from handling the business by compelling 
it to equalize an insurance rate of 70 cents against their rate of only 
15 cents. (Vol. 2, pp. 967-968.) Relative to the same matter Mr. 
Warfield testified that insurance companies must regard the situation 
from a business standpoint, and that if they granted insurance to a 
small competing line at as low a rate comparatively, having due 
regard for the class of vessel, they might do so at the risk of losing 
the very much larger business of the “A. G. W. I.” and Morgan Lines. 
(Vol. 2, p. 996.) 

(6) By the granting of'rebates to shippers who were under 
contract to ship their entire product by a given line. Although 
this practice has ceased, it was described to the Committee as having 
existed in the large movement of molasses from New Orleans to 
Philadelphia. In this trade the Morgan Line is said to have bound 
nearly all shippers under contracts for the transportation of their 
molasses at a rate of $1.80 per barrel, with the understanding that at 
the end of the season the shipper would receive a rebate of 35 cents 
a barrel. Although the Philadelphia & Gulf Line put in an open rate, 
less the rebate, of $1.40, it “ secured no other business since the other 


396 AFFILIATIONS ON THE ATLANTIC AND GULF COASTS. 

line held a threat over the shippers and asserted that it would be only 
a short time until the independent line would go out of business.” 
(Testimony of F. S. Groves, vol. 2, pp. 943-944.) 

(7) By refusing independent lines membership in the 
Southwestern Tariff Committee, representing the railroads and 
steamship companies interested in the traffic to and from Texas, 
Oklahoma, Arkansas, and Louisiana, and the Coastwise Freight Con¬ 
ference, composed of practically all the steamship lines out of New 
York which are engaged in the southbound coast business, as well as 
certain railroads. The general purposes of these two conferences 
are the same and may be illustrated by briefly outlining the methods 
of the Southwestern Tariff Committee. This committee was estab¬ 
lished for the purpose of printing tariffs economically and of afford¬ 
ing an opportunity for periodical conferences among the officers of 
the various railroads and steamship companies interested in the 
trade with a view to determining rates and discussing the effects 
which any advance or reduction in rates would have upon the busi¬ 
ness of all the parties concerned. If some line annoimces its inten¬ 
tion of establishing a rate, having due regard to the Interstate Com¬ 
merce Commission’s rulings, the same is published by the chairman 
of the committee. But, as Mr. Warfield, for many years a member 
of the committee while representing the Mallory Line as freight- 
traffic manager, testified, the conference lines usually give notice of 
their’intended rate changes only after the situation has been talked 
over in conference and a conclusion reached that such a change ought 
to be made. The division of through rates between the boat lines 
and the railroads is also a matter for determination by this con¬ 
ference, so that there will be no discrimination in this respect against 
any of the conference lines, and that the divisions of all the lines via 
one gateway may be on the same basis. 

Not to be a member of these tariff committees placed a line at the 
disadvantage of publishing the tariffs at its own expense and of not 
being able to enjoy the same through rates from seaboard territory 
to Texas, Oklahoma, Arkansas, Colorado, and Utah. Thus Mr. 
Warfield testified: 

If in the traffic from Buffalo to Dallas, or from Rochester to Dallas, or from 
Albany to Dallas, we went to the expense of publishing the tariff which is in 
effect by the Mallory & Morgan Lines it would cost us several thousand dollars 
a year; perhaps as much as the amount of business involved under that 


AFFILIATIONS ON THE ATLANTIC AND GULF COASTS. 397 


tariff. * ♦ ♦ Take, for example, the Coastwise Freight Conference, com¬ 

prising all these lines. They have an agreement with the railroad lines from 
the southern ports, say Galveston to the interior, to prorate the balance of that 
through rate on a graded percentage basis. For instance, let us say that the 
rate from Rochester to Dallas is $1 by rail and water, and the proportion of 
the arbitrary, as we term it, from Rochester to ship side. New York, is 25 
cents. That leaves 75 cents to be divided between the steamer to Galveston 
and the railroad to Dallas. The basis of that division is 45 per cent to the 
steamer line and 65 per cent to the rail line. Now, because we are not members 
of that conference and have not the privilege of the agreement that membership 
carries we would have to pay the 25 cents to New York in the first place and 
whatever the rate may be from Galveston to Dallas and take the remainder as 
the ship’s proportion, which would be far less than 45 per cent of 75 cents. In 
other words, we would have to pay local rates to New York and from Galveston. 
Being out of the conference, the railroads will make no proportionate agreement 
with us as to the division of rates. ♦ ♦ * if -^q were permitted to join the 

Coastwise Freight Conference all we would have to do would be to file a con¬ 
currence with the Interstate Commerce Commission, and we would then enjoy 
the through rate and the divisions. * ♦ * But now we have nothing to 

concur in, since the rates are not published applicable our way. They must 
first be published as being applicable via our route, and simultaneously with 
that we would file the concurrence and the question of all other rail arrange¬ 
ments would follow as a matter of mere detail. * * ♦ These tariff com¬ 

mittees seem to w^ork fairly satisfactorily in most cases, except when it comes 
to a competitor that is not within the fold. * ♦ * Under those conditions it 

represents the penalty of engaging in a line of business that has been dominated 
by a certain number of concerns or companies. (Abstra'ct of Mr. Warfield’s 
testimony, vol. 2, pp. 1003-1004, 1008.) 

In view of the foregoing advantages the Philadelphia & Gulf 
Steamship Co. applied for membership in the Southwestern Tariff 
Committee and the Seaboard & Gulf line for membership in the 
Coastwise Freight Conference, and in both cases the application was 
refused. With reference to the Philadelphia & Gulf Co., Mr. Groves 
stated that* although the line had active support in the committee by 
the Frisco and Kock Island railroad systems, admission to member¬ 
ship in the committee required the unanimous consent of its existing 
members, and the Southern Pacific Co. refused absolutely to give its 
consent, even threatening to withdraw from the committee if the 
Philadelphia & Gulf line’s application for admission were approved. 
(Vol. 2, pp. 944-951.) Shortly after its organization the Seaboard & 
Steamship Co. made application for membership in the Coastwise 
Freight Conference, agreeing to subscribe to all its rules and condi- 


398 AFFILIATIONS ON THE ATLANTIC AND GULF COASTS. 


tions, but the application was denied without any reason being given. 
The reason for the refusal of membership, however, was, in Mr. 
Warfield’s opinion, the reluctance of the other lines to have his line 
enjoy through rates as favorable as their own. (Vol. 2, p. 1002.) 

■Relations Between the Railroads and the Atlantic Coast Steamship Lines. 

TraffiG arrangements between rail and water carriers, —As pre¬ 
viously indicated, it is the general contention of steamship-line rep¬ 
resentatives that the purely port-to-port business can not even tem¬ 
porarily maintain the established lines in the Atlantic coastwise 
trade, and that the lines are principally dependent upon through ton¬ 
nage coming from or destined to the interior, i. e., have become, in 
large measure, auxiliaries of the railroads. For the proper handling 
of this through traffic practically all the lines under railroad control 
or belonging to the aforementioned shipping consolidations have 
entered into arrangements for through routing of freight and divi¬ 
sion of rates with substantially all the railroads diverging from 
the ports served by the various water carriers.^ Many of the estab¬ 
lished rates are divided on a percentage basis, determined by a con¬ 
sideration of the mileage (usually 3 water miles being considered 
as 1 rail mile); others are divided on a revenue basis or on the basis 
of specific proportions. Since all the carriers belong to the same rat¬ 
ing committees or conferences, it follows that the officers of the 
various railroads and steamship lines can, through periodical con¬ 
ferences, determine the rates and divisions in such a manner that 
there “ will be no discrimination against any of the conference lines 
and that the divisions of all the lines via one gateway will be on the 
same basis” (p. 396). (Also see vol. 2, pp. 1162-1167, 1177-1180, 
1189-1191,1197-1198,1203-1205.) In this connection, however, many 
of the steamship companies have been very emphatic in reporting to 
the committee that their affiliation with existing traffic associations is 
simply for the purpose of discussion and interchange of information 
and opinions on matters of mutual interest with the other lines, but 
with the distinct understanding that participation in such conferences 
in no way restricts their right of separate and independent action. 

1 In reply to the question contained in the Committee’s Schedule of Inquiries, “ Have 
any railroads refused to prorate with your line?” all the Atlantic coast lines under 
railroad control or belonging to the Eastern Steamship Corporation and A. G. W. I. 
groups have replied in the negative. Nearly all these lines also report arrangements 
with other coastwise water lines for the interchange of traffic under through tariffs. 



AFFILIATIONS ON THE ATLANTIC AND GULF COASTS. 399 

The majority of the traffic arrangements between rail and water 
carriers, judging from the reports filed with the committee by the 
railroads and steamship lines involved, have not been reduced to 
formal written agreements. Almost without exception, also, the rail¬ 
roads deny the existence of any agreements or understandings other 
than those relating to the lawful publication of joint rates with 
domestic water lines with which there is an interchange of traffic and 
the division of such rates, and none, it is asserted, provides for an 
exclusive working arrangement between the parties in matters con¬ 
cerning water transportation. The few agreements filed with the 
committee which deviate from the above rule, refer to one of three 
features: the mutual interchange of traffic between the rail and 
water carriers “ so far as such traffic can be controlled ”; the stipu¬ 
lation that certain freight delivered by the railroad to the water 
line shall have preference as to room and loading in its vessels; and 
the agreement, “ in so far as it may be legally done,” that, for example, 
the water line “ shall be recognized as the preferential water-line 
connection of the railroad in respect to traffic handled through the 
port of Norfolk, orginating at or destined to Boston, Providence, 
and interior New England points, and also as regards traffic moving 
through such other port or ports as may hereafter be mutually agreed 
upon.” ^ 

Mention should be made of the tacit understanding which recently 
existed with reference to eastern business destined to Texas points. 
This arrangement, which was strictly observed until recently, was to 
the effect that business originating in the Eastern States, and east of 
a line drawn north and south from Buffalo, through Pittsburgh, 
Wheeling, and Parkersburg to Huntington, should move to Texas 
points via the water route, while the business west of that line, includ¬ 
ing the Pittsburgh business, should move via the all-rail route. (See 
vol. 2, pp. 1105,1135-1136,1187-1189.) Mr. H. H. Raymond testified 
that this arrangement for a division of territory was effected by the 
carriers through an agreement in about 1878, following a long period 
of rate cutting; that although the agreement was discontinued the 
traffic of the carriers continued along the line of least resistance; 
and that the arrangement was strictly observed until about 1908 or 

1 Agreement of May, 1907, between the Norfolk & Western Railway Co. and the Mer¬ 

chants & Miners Transportation Co. 



400 AFFILIATIONS ON THE ATLANTIC AND GULF COASTS. 

1909 (vol. 2, pp. 1187, 1188). He stated that he knew his companies 
did not go west of a defined line some years ago, but that now 
shippers can route business west of that line to New York at local 
rates and have it sent from there to the southern destination. Mr. 
J. C. Dillard, traffic manager of the Waco Freight Bureau, however, 
expressed his belief that the arrangement “ is substantially the same 
to-day ” (vol. 2, p. 1136); while Mr. H. H. Raymond stated that, in 
his opinion, it was not profitable for a water route to extend much 
beyond Pittsburgh (vol. 2, p. 1187). 

Refusal of railroads to enter into through routing and prorating 
arrangements on package freight with independent lines. —Although 
nearly all the lines under railroad control or belonging to shipping 
consolidations have the advantage of such arrangements, various in¬ 
dependent water lines have been refused the privilege. This refusal 
was the subject of severe criticism by representatives of independent 
steamship interests in their testimony before the committee. Joint 
through rail-and-water rates were regarded by these witnesses as of 
vital importance, since they are nearly always less than the sum of 
the local rates. Their more general establishment, it was contended, 
is necessary if any successful attempt at competition by independent 
lines is desired. To deprive an independent line of the advantages 
accruing from a joint-rate arrangement with railroads places that 
line in a defenseless position as compared with a rival line not thus 
handicapped. Without a prorating arrangement, it is argued, the 
independent line can not secure interior business, since the sum of 
any local water rate it could make plus the local rail rate would be 
higher than the through rate. On the other hand, the line having 
the prorating arrangement with the railroad can make a.profit on 
the through business and eliminate its less fortunate competitor— 
restricted chiefly to traffic originating at the ports—by cutting rates 
on port-to-port business to an unprofitable point. (Vol. 1, pp. 508, 
512-513.) 

In view of the importance of the subject, a brief enumeration of the 
instances where the prorating privilege has been refused to independ¬ 
ent water lines will be given. The refusal of membership to the Phila¬ 
delphia & Gulf Steamship Co. and the Seaboard & Gulf Steamship 
Co. in the Southwestern Tariff Committee and the Coastwise Freight 
Conference, respectively, has already been discussed (pp. 396, 397). 


AFFILIATIONS ON THE ATLANTIC AND GULF COASTS. 401 

Reference has also been made to the experience of the New York & 
Baltimore Transportation Line and the Baltimore & Carolina Steam¬ 
ship Co. The first line reported to the Committee that joint traffic 
arrangements were refused it by the New York Central, Baltimore & 
Ohio, New York, New Haven & Hartford, New England Navigation 
Co., and the Metropolitan Steamship Co. (p. 388), while the last 
line reported that the Atlantic Coast Line Railroad refused to pro¬ 
rate with it north of Charleston and north, south, and west of Lanes, 
S. C., and the Seaboard Air Line as regards all points (p. 389). 

Messrs. A. H. & E. M. Bull, representing important tramp-vessel 
interests on the Atlantic coast, testified that they were unable to enter 
into package freight business at nearly all of the Atlantic ports 
because of the railroads’ refusal to prorate with them as they do with 
other lines. According to their statement, they finally managed to 
start a service at Stockton Springs, Me., through an arrangement 
with the Bangor & Aroostook Railroad, the only independent railroad 
in New England. When, however, they tried to extend their opera¬ 
tions into the Maine Central’s district through a traffic arrangement 
for the issuance of through bills of lading to and from stations on its 
line, the request was absolutely refused. (Vol. 1, pp. 502-505.) The 
Colonial Navigation Co. also reported that the New York, New 
Haven & Hartford Railroad “ simply declined our request.” 

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CHAPTER XIV. 
SUMMARY. 


EXTENT AND METHODS OF CONTROL OF COMPETITION BETWEEN 
WATER CARRIERS IN THE DOMESTIC TRADE. 


Extent of Control. 

The foregoing chapters discuss the control of regular line services 
in the most important divisions of this country’s domestic commerce. 
With the exception of the Pacific coast trade proper, it was shown 
that the line traffic is handled by comparatively few companies and 
that these are largely controlled by railroads and shipping consoli¬ 
dations. Thus, in the entire Atlantic and Gulf coastwise trade (ex¬ 
clusive of all inland waterway and purely local carriers), 28 lines, 
representing 235 steamers of 549,821 gross tons, furnish the line 
service. Of this number of lines, 10 are railroad owned and repre¬ 
sent 128 steamers of 340,084 gross tons, or 54.5 per cent of the total 
number of steamers in the trade and 61.9 per cent of the tonnage. 
Seven lines, operating 71 steamers of 175,971 gross tons in the coast¬ 
wise trade, belong to the Eastern Steamship Corporation and the 
Atlantic, Gulf & West Indies Steamship Lines, and represent in the 
aggregate nearly 30 per cent of the total number of steamers and 32 
per cent of the tonnage. Combining the two interests, it appears 
that the railroads and two Atlantic coast shipping consolidations 
control nearly 85 per cent of the steamers and nearly 94 per cent of 
the gross tonnage engaged in the entire Atlantic and Gulf coastwise 
trade. Attention may be called again to the fact that very few of 
the routes between any two ports on the entire Atlantic and Gulf 

coasts are served by more than one line (pp* 369-^70, 382, 383). 

403 




404 STEAMSHIP COMPANY AEFILIATIONS SUMMARIZED. 


CONTROL OF STEAMSHIP LINES ENGAGED IN THE ATLANTIC, GULP 
AND PACIFIC COAST, AND GREAT LAKES TRADE." 



Number 
of rail¬ 
roads^ 
consoli¬ 
dations, 
and in¬ 
depend¬ 
ent lines. 

Number 
of navi¬ 
gation 
compa¬ 
nies con¬ 
trolled. 

Number 
of steam¬ 
ers op¬ 
erated. 

Gross ton¬ 
nage of 
steamers 
operated. 

Per cent 
of total 
steam¬ 
ers op¬ 
erated. 

Percent 
of total 
tonnage 
oper¬ 
ated. 

Great Lakes: 







Railroads. 

8 

6 

63 

180, 007 

47.4 

64.2 

ffV«irvr»lTinr /^nT>Rir»lnrlci+.inT1S 







Other lines. 

17 

17 

70 

100,557 

52.6 

35.8 

Total. 

25 

23 

133 

280, 564 

100.0 

100.0. 

Atlantic and Gulf coasts: 







Railroads ^. 

8 

10 

128 

340,084 

54.5 

61.9 

Shipping consolidations ^ 

2 

7 

71 

175, 971 

30.2 

32.0 

Other lines. 

11 

11 

36 

33, 766 

15.3 

6.1 

Total. 

21 

28 

235 

549,821 

100.0 

100.0 

Pacific coast: * 







Railroads ®. 

3 

3 

18 

69,470 

17.0 

19. 82 

Shipping consolidations ® 

2 

64 

»50 

8 103, 209 

47.2 

29.44 

Other lines ^. 

8 

8 

38 

177, 833 

35.8 

50. 74 

Total. 

13 

15 

106 

350, 512 

100.0 

100. 00 

Grand total: 

Railroads *. 

« 19 

19 

209 

589, 561 

44.1 

49. 93 

Shipping consolidations. 

4 

11 

121 

279,180 

25.5 

23.64 

Other lines. 

36 

35 

144 

312,156 

30.4 

26.43 

Grand total. 

59 

66 

474 

1,180, 897 

100.0 

100. 00 


t Exclusive of all inland waterway (except the Great Lakes) and purely local carriers, as well as purely 
bulk carriers. 

• The marine interests of the Maine Central R. R. Co., controlled by the New York, New Haven & Hart¬ 
ford R. R. Co., have been combined with the marine interests of the latter. 

8 Includes only the coastwise lines of the Eastern Steamship Corporation and the A. Q. W. I. 

< Includes the lines engaged in the Alaskan, Hawaiian, and intercoastal trade. 

• Includes only the tonnage of the Pacific Mail Steamship Co., which is engaged in the California-Panama 
service. 

• The figures do not include the Juneau and Western Alaska Steamship Cos., which belong to the Pacific 
Coast Co., but their gross tonnage could not be ascertained. 

»Includes the entire gross tonnage of the American-Hawaiian and Oceanic Steamship Cos. The ton¬ 
nage of the North Pacific Steamship and Panama Railroad Cos., not having been finmished by the com¬ 
panies, was taken from the statistics furnished by the United States Bureau of Navigation for 1912. The 
other data was furnished directly by the companies involved. 

• This total is not the sum of the above-mentioned figures because various railroads own lines engaged 
in several divisions of our coastwise commerce. Duplications of this kind have been eliminated. Some 
of the companies comprised in the total, as noted in the preceding chapters, are subsidiaries of larger rail¬ 
road systems. The total includes the railroads actually owning or controlling the navigation companies, 
although some are only subsidiaries of other railroads. 





























































































STEAMSHIP COMPANY AFFILIATIONS SUMMARIZED. 405 

On the Great Lakes the through package freight from the western 
gateways to eastern seaports via Buffalo is controlled exclusively by 
six railroad-owned boat lines, and these six lines represent 63 steam¬ 
ers of 180,007 gross tons, or approximately 47 per cent of the line 
steamers and 64 per cent of the line tonnage operating on the Great 
Lakes. Exclusive of ferry companies and strictly passenger lines, 
17 other freight lines of some importance connect various Lake ports. 
These, however, represent but slightly more than one-third of the 
Great Lakes line tonnage. Most of these independent lines are com¬ 
paratively small; none engages in the through traffic from western 
terminal centers; and 7 report that they encounter no direct competi¬ 
tion from other water carriers.^ 

Even in the Pacific coast trade (including the intercoastal trade), 
where independent steamship lines make a more prominent showing 
than in either the Atlantic coast or Great Lakes trade, railroads and 
shipping consolidations represent a large proportion of the total ton¬ 
nage. The 15 lines already noted as operating in this trade repre¬ 
sent (after excluding steamers engaged in the foreign trade) a total 
of 106 steamers of 350,512 gross tons. Three of these lines are owned 
by railroads and four by shipping consolidations, and represent a 
combined total of 68 steamers of 172,679 gross tons, or over 64 per 
cent of the total number of steamers for the 15 lines and over 49 per 
cent of the tonnage. 

Considering all the line services noted in the preceding chapters 
as engaged in the coastwise and Great Lakes trade, the following 
totals appear: The lines number 66; the steamers operated strictly 
in the domestic trade, 474; and the gross tonnage of these steamers, 
1,180,897 tons. Of these totals 19 railroads^ control 209 steamers 
(44.1 per cent of the total) and 589,561 gross tons (nearly 50 per cent 
of the total).^ Eleven lines belong to shipping consolidations and 
operate 121 steamers (25.5 per cent of the total) of 279,180 gross 


1 For consolidations among bulk carriers on the Great I.akes see pages 336-346. 

2 Of the total line tonnage indicated for the 19 railroads, 2 roads—the New York, 
New Haven & Hartford Railroad Co. and the Southern Pacific Co.—own or control, 
directly or indirectly, 292,698 gross tons, or nearly 50 per cent of the total tonnage 
owned or controlled by railroads. The New York, New Haven & Hartford Railroad Co. 
owns, directly or indirectly, 154,647 tons and the Southern Pacific Co. 138,051 tons. 
These figures, however, comprise only the line tonnage engaged in the coastwise trade 
and do not Include the tonnage operated in either the foreign trade or the bulk traffic. 

*In addition to the above figure of 589,561 gross tons of domestic line tonnage, 
American railroads own or control considerable additional line tonnage engaged in 
domestic inland commerce. After there is added the steamer tonnage of water lines 
(directly operated or in which railroads own a majority of the stock) on Chesapeake Bay 
and inland lakes and rivers, the total gross tonnage controlled by railroads appears to 

be 658,263 tons. 




406 


STEAMSHIP COMPANY AFFILIATIONS SUMMARIZED. 


tons (23.6 per cent of the total). All told, the 30 lines referred to in 
the preceding chapters as controlled by railroads or shipping con¬ 
solidations operate 330 steamers of 868,741 gross tons, or nearly 70 
per cent of the total number of steamers and 74 per cent of the ton¬ 
nage. It should be added that in acquiring so large a proportion of 
the country’s total coastwise line tonnage the railroads, and shipping 
consolidations were not actuated solely by the desire to control the 
competition of rival carriers, although this probably was the princi¬ 
pal motive in the majority of instances. In a considerable number 
of cases, as illustrated by the Atlantic coast lines acquired by south¬ 
ern railway companies, the railroads acquired boat lines to secure 
feeders or to obtain a water extension to territory not open to their 
rail lines. Some of the earliest railroad acquisitions of water lines 
(illustrated by some of the lines owned by the New York, New Haven 
& Hartford Railroad) were incidental to the merger of various rail¬ 
road companies which had already acquired navigation companies as 
feeders to or extensions of their lines. Several witnesses also testi¬ 
fied that the fundamental purpose underlying the organization of the 
shipping consolidations they represent was not to restrict competi¬ 
tion, since the subsidiary lines are not competitive geographically, 
but to curtail administrative and terminal expenses, which would be 
very much larger for the several companies if operated independ¬ 
ently. (See testimony of H. H. Raymond, relative to the A. G. W. I., 
vol. 2, pp. 1158-1159.) 

Much the same situation as was noted in the coastwise and Great 
Lakes trade also exists on inland rivers, bays, and canals.^ Despite 
the continued improvement of waterways and the great increase of 
traffic in the coastwise and Great Lakes trade, “ the total river traffic 
of the country has steadily decreased both proportionately and abso¬ 
lutely, with the result that few rivers are used to anything approach¬ 
ing their full capacity.” ’ While, generally speaking, the decline of 
navigation lines on inland waterways is largely traceable to the 
natural extension and legitimate competition of the railroads, there 
is ample evidence to show that the railroads have successfully op- 

iThe line traffic on inland rivers, bays, and canals has not been emphasized, partly 
because of its relative unimportance, and partly because the subject is fully covered in 
the preliminary and final reports of the National Waterways Commission. (S. Doc. No. 
325, 60th Cong., 1st sess., and S. Doc. No. 469, 62d Cong., 2d sess.) Railroad ownership 
and control of canals is discussed in the Commissioner of Corporations Report on “ Con¬ 
trol of Water Carriers by Railroads and by Shipping Consolidations,” Dec. 23, 1912. 

■ Preliminary Report of the Inland Waterways Commission, p. 20. 




STEAMSHIP COMPANY AFFILIATIONS SUMMARIZED. 407 


posed the maintenance and development of river and canal traffic by 
a variety of effective methods, mainly by acquiring competitive water 
lines and canals, by obtaining control of the terminal facilities, by the 
use of rebates, or by the undercutting of rates. Aside from the acqui¬ 
sition of competing lines, the undercutting of rates seems to have been 
the favorite method adopted by railroads to eliminate water com¬ 
petitors. Since the railroads reach all sections of the interior, and 
the inland navigation lines are restricted to their water course, they 
can easily control so large a proportion of the total freight as to leave 
the water lines insufficient freight to maintain proper terminals and 
an efficient service. As reported by the Inland Waterways Commis¬ 
sion : 

So large a portion of railway traffic is free from water competition that rail¬ 
ways can readily afford to so reduce rates on those portions affected by such 
competition as to destroy the profits of the water lines without appreciably 
affecting the profits of the rail systems, which recoup these reductions by higher 
rates elsewhere. This has been the case with most of the great inland water¬ 
ways, excepting the Great Lakes where the conditions of water and traffic 
approach those of the open sea.' 

This method of eliminating water competition is well illustrated by 
the experience of water lines on the Mississippi Eiver system.^ On 
this system packet-line services have largely disappeared, owing to 

1 Preliminary Report of the Inland Waterways Commission, p. 20. 

* The Inland Waterways Commission reports that: 

“ The opening of the Yazoo and Mississippi Valley Railroad, an Illinois Central prop¬ 
erty, went far toward accomplishing the downfall of steamboat trafiSc on the lower 
Mississippi. The railroad paralleled the river from Memphis to New Orleans, reaching 
all the important towns on the east bank of the river. Prior to the opening of the rail¬ 
road, cotton from this territory had been sent to New Orleans by river at $1 to $1.50 per 
bale, but on the completion of the railroad the rail rate soon reached the point where 
it was unprofitable for the ports to handle cotton. Prom river competitive points such 
as Vicksburg, the rail rate dropped as low as 45 or 50 cents per bale to New Orleans, 
while from points back from the river, such as Rolling Fort, Miss., about 40 miles from 
Vicksburg and 10 from the river, the railroad recouped itself by charging $1 to $2 per 
bale. 

“ The matter of Insurance also operated against the river route. The rail rates, as 
given above included the common carriers’ liability of risk, but on all cotton shipped by 
boat the shipper was put to an additional expense of from one-half of 1 per cent to 1 
per cent of the value of the shipment. The premium on shipments from Vicksburg to 
New Orleans amounted to 25 cents on a bale of cotton valued at $50.” (Preliminary 
Report, p. 135.) 

Again the commission reports: 

“ The Mississippi is paralleled on both sides by railroads operating long trains over 
easy grades at the least possible cost. River steamers can still underbid the railroads to 
some extent on local traffic, but they are at a disadvantage in loading or terminal ex¬ 
penses, and in insurance of risk, as well as on account of the rise and fall of water 
in the river. It is claimed that the railroads take traffic at unduly low rates along the 
river and at competitive points generally, and recoup themselves by high charges at 
noncompetitive points; but in water traffic there are practically no competitive points, 
and steamboat lines are compelled by the necessities of the case to make their rates with 
some regard to distance.” (Preliminary Report, pp. 315-316.) 




408 STEAMSHIP COMPANY APFILIATIONS SUMMARIZED. 

railroad competition, and the few lines remaining, while generally 
independent of railroad control, are but weak competitors. Effective 
railroad opposition to independent water lines also exists on the 
Nation’s other leading rivers, such as the Columbia and Hudson.^ 
Most of the canals of the country have also long since passed into 
the hands of competing railroads. Almost invariably, following the 
acquisition of the canals, the railroads failed to maintain the effi¬ 
ciency of the same for transportation purposes, or raised the tolls so 
high as to preclude their use, or entirely abandoned the property. In 
some instances, however, the decrease or practical disappearance of 
canal traffic is traceable to the antiquated character of the canal, and 
in all likelihood most of the privately owned canals would by this 
time have ceased to be an efficient means of transportation, even 
though they had not been acquired or controlled by the railroads. 
Even the most important State, canal—the Erie Canal—as already 
shown, is so completely dominated by the railroads, as far as through 
traffic is concerned, that the movement of freight originating outside 
of the State of New York via this route has almost reached the van¬ 
ishing point. Not only do the railroads own all the through Lake 
freight lines centering at Buffalo, but they control practically all the 
terminal facilities at both ends of the canal as well as the forwarding 
agencies and boat owners. At present about 90 per cent of the mile¬ 
age of the private canals still in operation is under railroad control.* 


1 Mr. B. P. Murray, president of Murray’s Line, a freight line from New York to 
Albany and Troy, testified before the committee that the railroads are pursuing a policy 
of restricting the territory that may be reached by differential water lines on the Hudson 
River, and are discriminating against water carriers by forcing them to pay local rates 
between all points on the railroad and the water line, thus reducing the divisions which 
the water lines had formerly received. In view of this practice, he testified that rail¬ 
roads should be compelled to prorate with regularly established water lines, and to grant 
them as good rates, divisions, and facilities as they give their most favored connection 
or patron; and that if the railroads are not compelled to do this they are in a position 
to stifle competition, because local port-to-port business will rarely support any water 
line in the operation of boats and facilities demanded by the public. (Vol. 2, pp. 1273- 
1288.) 

Two main lines operate on the Columbia River, viz, the Open River Transportation Co. 
and Tha Dalles, Portland & Astoria Navigation Co., the latter being controlled through 
stock ownership by the Spokane, Portland & Seattle Railway Co., which in turn, is con¬ 
trolled jointly by the Great Northern and Northern Pacific Railway Cos. The Open 
River Transportation Co. reported that “ the faster boats of The Dalles, Portland & 
Astoria Navigation Co. precede theirs up the river and collect the cargo, thus killing 
their business. 

* For a detailed account of the various canals owned or controlled by railroads, see 
Chap. Ill on “ Railroad Control of Canals and their Trafllc ” in the report of the Com¬ 
missioner of Corporations on “ Control of Water Carriers by Railroads and by Shipping 
Consolidations,” Dec. 23, 1912. According to this report it appears that control was 
secured over many of the canals by long-term leases. 



STEAMSHIP COMPANY AFFILIATIONS SUMMARIZED. 409 
Methods of Control Summarized. 

The numerous methods of controlling competition between water 
carriers in the domestic trade, referred to in the preceding pages, may 
be grouped under three headings, viz, (1) control through the ac¬ 
quisition of water lines or the ownership of accessories to the lines; 

(2) control through agreements or understandings; and (3) control 
through special practices. Briefly summarized, the various methods 
adopted for the control of competition are the following; ^ 

I. Control through the acquisition of water lines or the ownership 
of accessories to the lirhes: 

(1) Direct railroad ownership and operation of water lines, 
the railroad’s marine interests not being incorporated separately 
(pp. 377, 390). 

(2) Kailroad ownership through subsidiaries, or subsidiaries of 
subsidiaries, either rail or water (pp. 317, 318, 373-376). 

(3) Control by lease, especially in the case of canals (p. 408). 

(4) Ownership of boat lines by other boat lines, or by holding 
companies (pp. 352-353, 378-379, 383-386). 

(5) Joint control of a water line by several railroads (pp. 
317, 318, 386-388). 

(6) Control of one water carrier over another, or of a railroad 
over a water line, indicated by one or more officers in common or by 
common representation on the board of directors (pp. 344-346, 350). 

(7) Control indicated by a community of interest through influ¬ 
ential stockholders (pp. 344-346). 

(8) Railroad control of competing water lines or canals through 
the ownership or control of forwarding companies, thus diverting 
traffic to their own rail or water lines by refusing to exchange 
through freight with independent water lines. The latter are thus 
forced to depend upon local business, which is too limited to main¬ 
tain the efficiency of the line (pp. 325-327). 

(9) Railroad or steamship company ownership of exclusive 
terminal facilities (pp. 323-324, 327-328). 

(10) Ownership or control of bulk carriers by producing and 
trading companies, which, while controlling a large portion of the 
traffic in a given commodity, also act as common carriers. These 
companies may also charter boats of independent lines on such favor- 

1 The page references which follow refer to this volume, and are Intended only to direct 
attention to a few typical examples. 





410 STEAMSHIP COMPANY AFFILIATIONS SUMMARIZED. 

able terms as to induce such lines to observe a certain policy in the 
fixing and maintenance of rates, (pp. 377-338, 344^345). 

II. Control through agreements or understandings: 

(11) Through agreements between water lines to divide the ter¬ 
ritory or charge certain rates. Unlike the practice in the foreign 
trade, such agreements are few in the domestic trade, the desired 
elimination of objectionable competition being effected through any 
one or more of the other methods (pp. 399-400). 

(12) Through traffic associations, participated in by railroads 
and water lines, which publish tariffs but do not definitely bind the 
lines, i. e., there is no express agreement to observe the rates. While 
the water lines are emphatic in reporting that their affiliation with 
existing tariff associations or conferences is simply for the purpose 
of discussion and interchange of information and opinions on mat¬ 
ters of mutual interest, and that their rights of separate and inde¬ 
pendent action are in no way restricted, the testimony shows that 
the rates and divisions of rates are determined at these conferences 
in such a manner as to cause no discrimination against any of the 
members and to place the rate divisions for all lines via one gateway 
on the same basis (pp. 396-397). 

(13) By requiring the unanimous consent of the existing mem¬ 
bers in certain traffic associations or conferences before admission 
can be secured by an outside line. Not to be granted membership in 
such associations places the outside line at the disadvantage of pub¬ 
lishing tariffs at its own expense and of not being able to enjoy the 
same through rail-and-water rates as the conference lines (pp. 
396-398). 

(14) Agreements or understandings not to charter or sell vessels 
to certain lines or for certain trades (pp. 392-393). 

III. Control through special practices: 

(15) A railroad obtains control of a water line or canal and (1) 
fails to maintain the efficiency of the same, thus making water trans¬ 
portation so expensive as to eliminate competition, or (2) fixes rates 
so high as to preclude its use or (3) abandons the property (p. 408). 

(16) A railroad charters space from a competing water line, 
although not using it, thus depriving shippers of space and making 
them dissatisfied with the water-line service (p. 360). 

(17) A railroad or its controlled water line or terminal com¬ 
pany holds all the available docks and shedded piers and refuses 


STEAMSHIP COMPANY AFFILIATIONS SUMMAKIZED. 411 

access to an independent line for the purpose of discharging and 
receiving cargo, or allows access only upon payment of unreasonable 
charges. The independent line is thus required to unload at some 
other dock and team the goods to and from the railroad station (pp. ' 
323-324, 327-328, 356). 

(18) A railroad or its controlled water line owns the available 
water frontage which it refuses to utilize, at the same time refusing 
to release the same by sale or otherwise (pp. 323-324). 

(19) A railway-water line or large all-water line cuts rates 
unduly (either by putting “fighting ships” in the trade or by 
having its regular boats quote unremunerative rates) and when com¬ 
petition has been destroyed advances the rates even higher than they 
had been originally. While cutting rates the large company recoups 
itself out of rates at noncompetitive points or on through business se¬ 
cured from railroads on a favorable basis (pp. 385-386, 393-394, 407). 

(20) Railroads manipulate rates so as to make the differential 
between their all-water, all-rail, and rail-water routes ineffectual as 
far as water transportation is concerned. The only inducement to 
use the water route is economy, and if the differential between the 
rail and water rates is made such as to just counterbalance the dis¬ 
advantages of the water route the railroads will secure the business 
because, all things considered, their service is preferred (pp. 328-330). 

(21) Water lines make contracts with shippers whereby rebates 
or special rates are granted if the shipper transports his entire prod¬ 
uct by a given line. Such contracts with important shippers greatly 
handicap independent lines in getting sufficient freight, especially if 
the contracting line spreads the report that the independent line will 
be allowed to remain in business only a short time. The important 
shippers, their business once obtained, can be held in line or disci¬ 
plined (pp. 395-396). 

(22) Large established water lines bring influence to bear on 
marine insurance underwriters whereby the independent line can 
secure only a less favorable rate, having due regard for the class of 
vessel, than its large and well-established competitors, thus forcing 
the independent carrier to equalize the extra cost of insurance in its 
rates to shippers (p. 395). 

(23) Railroads or steamship combinations can allow competing 
lines a certain amount of freight with the implied knowledge on the 
part of the competing line that the railway or steamship combina- 


412 STEAMSHIP COMPANY AEFILIATIOfTS SUMMAEIZED. 

tion possesses the power to withdraw this allotted freight if the 
competing line shows aggressiveness or is unwilling to conform to 
the line of conduct desired. Often valuable season contracts are 
made with independent water lines, which these lines do not wish to 
lose by competing for freight (pp. 342, 344-345). 

(24) Kailroads may divert bulk traffic from watercourses by 
granting special commodity rates “ in transit,” such as “ milling in 
transit ” and “ compressing in transit ” (p. 322). 

(25) Railroads can give access to docks to preferred water lines 
with which they have special arrangements, thus forcing shippers by 
other water lines to pay a series of charges for switching, docking, 
and unloading, and putting them to much inconvenience. In effect 
it means that the shipper who wishes the proper service must use the 
water line preferred by the railroad (pp. 334-335, 399). 

(26) Railroads may refuse to issue through bills of lading ex¬ 
cept to favoredjines, thus preventing independent lines from obtain¬ 
ing transfer traffic. To deprive an independent line of the advan¬ 
tages accruing from a joint rate arrangement with railroads places 
the line in a defenseless position as compared with competing lines 
not thus handicapped. Without such an arrangement the independ¬ 
ent line can not secure interior freight and is limited largely to port- 
to-port traffic, which is too small in volume to support the line. On 
the other hand, the water line having the prorating arrangement can 
cut rates to an unremunerative basis on the port-to-port traffic, thereby 
eliminating its less fortunate competitor, and recoup its losses in large 
measure out of the profits secured on the through business (pp. 
349-350, 354-356, 400-401). 

(27) Railroads charge more for the local haul from Buffalo to 
seaboard points, for example, on grain that is taken to Buffalo by 
boat than the proportionate share of the all-rail haul from Chicago 
to the seaboard, thus making the through rail-water route unprofit¬ 
able as compared with the all-rail route. The local rate for the 
eastern rail haul is so high as to leave little to the independent water 
carrier for its local lake haul (pp. 321-323). 

(28) Railroads can greatly reduce rates between those points 
only where they are competing with an independent water carrier. 
Since most of the traffic of a large railroad system is free from water 
competition, it can afford to lower the rates on the competitive traffic 
to an unremunerative basis without appreciably affecting the earnings 
of its entire system (p. 407). 



Recommendations of the Committee. 


413 







J 


The resolution (H. R. 587) under which the Committee has been 
investigating shipping combinations directs the Committee “ to report 
to the House all facts disclosed by said investigation, and what leg¬ 
islation, if any, it deems advisable in relation thereto.” In compli¬ 
ance with the directions of the resolution relating to legislation, the 
Committee submits the following recommendations: 

RECOMMElfDATIONS RELATING TO WATER CARRIERS ENGAGED 

IN THE FOREIGN TRADE. 

The facts contained in the foregoing report show that it is the 
almost universal practice for steamship lines engaging in the 
American foreign trade to operate, both on the in-bound and out¬ 
bound voyages, under the terms of written agreements, conference 
arrangements or gentlemen’s understandings, which have for their 
principal purpose the regulation of competition through either (1) 
the fixing or regulation of rates, (2) the apportionment of traffic by 
allotting the ports of sailing, restricting the number of sailings, or 
limiting the volume of freight which certain lines may carry, (3) 
the pooling of earnings from all or a portion of the traffic, or (4) 
meeting the competition of non-conference lines. Eighty such agree¬ 
ments or understandings, involving practically all the regular 
steamship lines operating on nearly every American foreign trade 
route, are described in the foregoing report. (For a full classifi¬ 
cation of these agreements see pp. 281 to 295 of the report.) The 
report also presents the economic advantages and disadvantages of 
steamship agreements and conference arrangements as presented 
to the Committee by steamship line representatives and the exporting 
and importing interests of the United States. (For a full classifi¬ 
cation of the advantages and disadvantages see pp. 295 to 307 of the 
foregoing report.) 

its recommendations it became apparent to the 
Committee, in view of all the facts presented, that only two courses 
of action were open for adoption. Either the agreements and under¬ 
standings, now so universally used, may be prohibited with a view 
to attempting the restoration of unrestricted competition, or the 
same may be recognized along lines which would eliminate existing 



416 KECOMMENDATIONS OP THE COMMITTEE. 

disadvantages and abuses. It is claimed that the adoption of the first 
course—the prohibition of cooperative arrangements between practi¬ 
cally all the lines in nearly all the divisions of our foreign trade— 
would not only involve a wholesale disturbance of existing conditions 
in the shipping business but would deprive American exporters and 
importers of the advantages claimed as resulting from agreements 
and conferences if honestly and fairly conducted, such as greater 
regularity and frequency of service, stability and uniformity of rates, 
economy in the cost of service, better distribution of sailings, mainte¬ 
nance of American and European rates to foreign markets on a 
parity, and equal treatment of shippers through the elimination of 
secret arrangements and underhanded methods of discrimination. 
(A classification of the advantages claimed as resulting from the 
aforementioned factors is presented on pp. 295 to 303 of the fore¬ 
going report.) 

These advantages, the Committee believes, can be secured only by 
permitting the several lines in any given trade to cooperate through 
some form of rate and pooling arrangement under Government 
supervision and control. It is the view of the Committee that open 
competition can not be assured for any length of time by ordering 
existing agreements terminated. The entire history of steamship 
agreements shows that in ocean commerce there is no happy medium 
between war and peace when several lines engage in the same trade. 
Most of the numerous agreements and conference arrangements 
discussed in the foregoing report were the outcome of rate wars, 
and represent a truce between the contending lines. To terminate 
existing agreements would necessarily bring about one of two re¬ 
sults: the lines would either engage in rate wars which would mean 
the elimination of the weak and the survival of the strong, or, to 
avoid a costly struggle, they would consolidate through common 
ownership. Neither result can be prevented by legislation, and 
either would mean a monopoly fully as effective, and it is believed 
more so, than can exist by virtue of an agreement. Moreover, steam¬ 
ship agreements and conferences are not confined to the lines en¬ 
gaging in the foreign trade of the United States. They are as uni¬ 
versally used in the foreign trade of other countries as in our own. 
The merchants of these countries now enjoy the foregoing advantages 
of cooperative arrangements, and to restore open and cutthroat 
competition among the lines serving the United States would place 



RECOMMENDATIONS OF THE COMMITTEE. 417 

American exporters at a disadvantage in many markets as com¬ 
pared with their foreign competitors. 

Steamship line representatives, as well as the patrons of the lines, 
were almost a unit in emphasizing to the Committee the importance 
and necessity of the aforementioned advantages of agreements and 
conferences, and in asserting that these advantages can only be 
effected permitting the several lines in a given trade to cooperate 
in the regulation of their rates and the expeditious handling of their 
business. Very few of the many exporters and importers, who com¬ 
municated with the Committee, were opposed to agreements and con¬ 
ferences in themselves, provided they are fairly and honestly con¬ 
ducted. Many, however, objected to the secrecy with which agree¬ 
ments and conferences are now conducted; and stated that, while the 
advantages must be admitted, they have no assurance and no means 
of knowing whether the conditions claimed for agreements and con¬ 
ferences are always fulfilled. A considerable number of complaints 
were also filed with the Committee objecting to excessive rates, dis¬ 
crimination between shippers in rates and cargo space, indifference 
to the landing of freight in proper condition, arbitrariness in the 
settlement of just claims, failure to give due notice to shippers 
when rates were to be increased, refusal to properly adjust rates as 
between various classes of commodities, and the unfairness of certain 
methods—such as fighting ships, deferred rebates, and threats to re¬ 
fuse shipping accommodations—used by some conference lines to 
meet the competition of nonconference lines. Unfortunately the 
truth of many of these complaints could not be ascertained because 
of the confidential nature of the information furnished. As pointed - 
out in the report (p. 306), it seemed to be the general impression 
among shippers who filed complaints with the Committee that the 
conference lines— 

so completely dominate the shippers with whom they deal that these shippers 
can not afford, for fear of retaliation, to place themselves in a position of active 
antagonism to the lines by openly giving particulars of their grievances. 

While admitting their many advantages, the Committee is not dis¬ 
posed to recognize steamship agreements and conferences, unless the 
same are brought under some form of effective government super¬ 
vision. To permit such agreements without government supervision 
would mean giving the parties thereto unrestricted right of action. 

25655°—vop 4—14-27 



418 


EECOMMENDATIONS OF THE COMMITTEE. 


Abuses exist, and the numerous complaints received by the Com¬ 
mittee show that they must be recognized. In nearly all the trade 
routes to and from the United States the conference lines have vir¬ 
tually a monopoly of the line service. 

All monopolies— 

As pointed out in the foregoing report (p. 304) — 

are liable to abuse, and in our foreign carrying trade the monopoly obtained 
by the conference lines has not been subjected to any legal control. While car¬ 
riers by land are supervised and must conform to statutory requirements in 
the matter of rates and treatment of shippers, steamship companies, through 
private arrangements, have secured for themselves monopolistic powers as 
effective in many instances as though they were statutory. Even granting the 
advantages claimed for steamship conferences and agreements, all may be with¬ 
drawn in the absence of supervisory control without the shippers having any 
redress or protection. The lines are under no legal obligation to continue these 
advantages. They exercise their powers as private combinations and are apt 
to abuse the same unless brought under effective government control. 

The Committee believes that the disadvantages and abuses con¬ 
nected with steamship agreements and conferences as now conducted 
are inherent, and can only be eliminated by effective government 
control; and it is such control that the Committee recommends as 
the means of preserving to American exporters and importers the 
advantages enumerated, and of preventing the abuses complained of. 

The consensus of opinion (see pp. 307 to 308 of the Report) — 

As expressed in the testimony of witnesses and in the numerous 
communications received by the Committee from shippers— 

is overwhelmingly in favor of some form of government regulation of steam¬ 
ship carriers engaged in this country’s foreign trade. Nearly all the steamship 
line representatives, who appeared before the Committee, expressed themslves as 
not opposed to government supervision which is reasonable and which is limited 
to the requirements of full publicity and approval of all agreements or arrange¬ 
ments which steamship lines may have entered into with other steamship lines, 
with shippers, or with other carriers and transportation agencies. On the other 
hand, the shippers who appeared as witnesses, or otherwise submitted recom¬ 
mendations for proposed legislation, were in the great majority of instances 
favorable to a comprehensive system of government supervision, sufficiently 
broad to embrace the regulation of rates without actually fixing them, the 
approval of contracts, agreements, and arrangements, and the general super¬ 
vision of all conditions of water transportation which vitally affect the inter¬ 
ests of shippers. While few of the shippers who communicated with the Com¬ 
mittee by letter (and the same may be said of witnesses) attempted to specify 


RECOMMENDATIONS OF THE COMMITTEE. 419 

the details of their recommendations, they are almost a unit in stating that 

they are convinced of the desirability of having the Interstate Commerce Com¬ 
mission, or a similar commission, exercise a general supervisory power over 
foreign water carriers and enforce among the conference lines at all times the 
various contentions which they have claimed for themselves during the bearings 
before the Committee. It is noteworthy that only five of the many communica¬ 
tions received by the Committee, which were unfavorable to steamship agree¬ 
ments and conferences as now conducted, display an attitude of hostility 
toward government regulation. In fact, many of the communications received 
from shippers make it clear that the writers regard the contentions of the con¬ 
ference line representatives as advantageous to shipper and shipowner if they 
are honestly and fairly carried out, but state that their experience has been 
to the effect that, once the combination of lines is established, it is apt to be 
used in an arbitrary and unfair way by favoring some large corporation or 
friend to the detriment of other shippers. Such discriminations and arbitrary 
treatment, it is believed, can only be eliminated by the establishment of some 
legally constituted authority which is empowered to hear complaints and to 
order the discontinuance of abuses. 

Relative to such supervisory control by the government of steam¬ 
ship carriers in the foreign trade of the United States, the Committee 
offers the following recommendations: 

(1) That navigation companies, firms or lines engaged in the for¬ 
eign trade of the United States be brought under the supervision of 
the Interstate Commerce Commission as regards the regulation of 
rates, the approval of contracts entered into with other water car¬ 
riers, with shippers, or vdth American railroads and other trans¬ 
portation agencies, and such other conditions of water transporta¬ 
tion as affect the interests of shippers. The Committee has had under 
consideration the recommendation of a separate Commission for 
this purpose, but believes that, in view of the close relations existing 
between rail and w^ater transportation, it would be best to entrust 
the supervisory control to the Interstate Commerce Commission. If 
found necessary, in view of the added duties involved in the exten¬ 
sion of the Interstate Commerce Commission’s jurisdiction to water 
transportation in accordance with the recommendations to follow, 
the Committee further recommends that the* membership of the 
Commission be enlarged. 

(2) That all carriers engaged in the foreign trade of the United 
States, parties to any agreements, understandings, or conference ar¬ 
rangements hereinafter referred to, be required to file for approval 
with the Interstate Commerce Commission a copy of all written agree- 


420 


RECOMMENDATIONS OF THE COMMITTEE. 


ments (or a complete memorandum if the understanding or agree¬ 
ment is oral) entered into (1) with any other steamship companies, 
firms, or lines engaged directly or indirectly in the American trade, 
or (2) with American shippers, railroads or other transportation 
agencies. All modifications and cancellations of such agreements or 
understandings as may be made from time to time should also be 
promptly filed. The Commission should be empowered to order 
canceled any such agreements, or any parts thereof, that it may find 
to be discriminating or unfair in character, or detrimental to the 
commercial interests of the United States. 

(3) That the Interstate Commerce Commission be empowered to 
investigate fully complaints charging the unreasonableness or un¬ 
fairness of rates, or to institute proceedings on its own initiative, 
and to order such rates changed if convinced that the rate under con¬ 
sideration is unreasonably high, or discriminating in character as 
between shippers, or ports, or between exporters of the United States 
and their foreign competitors; and to order restitution to shippers 
of all sums collected in excess of reasonable rates. This recom¬ 
mendation is also intended to extend to the supervision of freight 
classifications used by the lines, and the investigation of complaints 
charging refusal on the part of any carrier to properly adjust the 
rates between classes of commodities. 

The committee realizes that the steamship business differs essen¬ 
tially from that of the railroads (for those differences see pp. 309 to 
311 of the Keport),and that it might prove injurious to both ship own¬ 
ers and American exporters to require the lines to file their rates and 
not be permitted to- lower the same until after a stipulated period of 
notice to change rates had been given. On the other hand, the com¬ 
mittee feels that in the absence of government control steamship 
combinations may in many instances have it within their power to 
arbitrarily raise rates to an unreasonable degree both as regards the 
general level and in the case of particular commodities; or, if they 
so desire, to fail in maintaining rates from the United States to for¬ 
eign markets on a parity with those from other countries. It is not 
the purpose of this recommendation to prevent steamship lines from 
promptly lowering their rates to meet competitive conditions and thus 
to favor American exporters, who, in competing with foreign 
markets, often find it necessary in order to close their contracts to have 
quoted an immediate and favorable rate; but the purpose of the law 


RECOMMENDATIONS OF THE COMMITTEE. 421 

should be to protect the shipper against any unreasonably high rate 
which the combination lines may have within their power, by virtue 
of their agreements and conference arrangements, arbitrarily to im¬ 
pose in the absence of government supervision and control. 

(4) That rebating of freight rates to shippers be made illegal; 
and that, with due regard to the proper loading of the vessel and the 
tonnage available, discrimination between shippers, or ports, in the 
matter of rates and space accommodations be prohibited. In this 
connection it is the belief of the committee that water carriers should 
be required to charge equal rates to all shippers, irrespective of the 
volume of freight offered for shipment. 

(5) That the Interstate Commerce Commission be empowered to 
investigate fully all complaints (or to undertake such investigation 
on its own initiative) charging (1) failure on the part of any carrier 
to give reasonable notice of increase in rates, (2) unfair treatment 
of shippers in the matter of cargo space and other facilities, (3) the 
existence of discriminating or unfair contracts with certain ship¬ 
pers, and (4) unfairness in the settlement of claims and indifference 
to the landing of freight in proper condition. In this connection 
the Commission should be empowered to order the discontinuance 
of all unfair or discriminating practices which it may find to exist, 
and to adopt whatever measures it may deem necessary to protect 
the complainant against retaliation. 

(6) That the use of “fighting ships” and deferred rebates be pro¬ 
hibited in both the export and import trade of the United States, 
^loreover, all carriers should be prohibited from retaliating against 
any shipper by refusing space accommodations when such are avail¬ 
able, or by resorting to other unfair methods of discrimination, be¬ 
cause such shipper has patronized an independent line, or has filed 
a complaint charging unfair treatment, or for any other reason. 

(7) That adequate penalties be provided to correct and prevent 
the abuses hereinabove set forth. 

RECOMMENDATIONS RELATING TO WATER CARRIERS ENGAGED 

IN THE DOMESTIC TRADE. 

Unlike the practice of water carriers in the foreign trade of the 
.United States, agreements to divide the territory or charge certain 
rates in the domestic trade are few. Competition in rates between 
domestic water lines, however, has been quite as effectively eliminated 


422 RECOMMENDATIONS OF THE COMMITTEE. 

as in the foreign trade and this has been accomplished by the sev¬ 
eral lines through one or more of the numerous methods discussed 
in Part II of the foregoing report and summarized on pp. 409 to 
412. (Also see pp. 403 to 412 giving a “ summary of the extent and 
methods of control of competition between water carriers in the 
domestic trade.”) 

The Act of August 24, 1912, providing for the opening, mainte¬ 
nance, protection and operation of the Panama Canal, contains pro¬ 
visions extending the jurisdiction of the Interstate Commerce Com¬ 
mission over interstate transportation which involves the carriage 
of property by rail and water, in the following particulars; viz, 
(1) to establish physical connection, where this is reasonably prac¬ 
ticable and justifiable, between the rail carrier and the dock of the 
water carrier by directing either or both of the carriers to construct the 
connecting tracks; (2) “to establish through routes and maximum 
joint rates over such rail and water lines, and to determine all the 
terms and conditions under which such lines shall be operated in the 
handling of the traffic embraced”; and (3) “to establish maximum 
proportional rates by rail to and from the ports to which the traffic is 
brought, or from which it is taken by the water carrier, and to 
determine to what traffic and in connection with what vessels and 
upon what terms and conditions such rates will apply.” Section 11 
of the Act also provides for the divorcing of common carriers by 
water from the railroads under certain conditions. These legisla¬ 
tive requirements go far toward eliminating some of the unde¬ 
sirable practices which were found by the Committee to exist in 
the domestic commerce of the ITnited States. The Committee, how¬ 
ever, believes, in view of the facts presented in Part II of the report, 
that additional legislation is required, and wishes to offer the fol¬ 
lowing recommendations: 

(1) That the jurisdiction of the Interstate Commerce Commission 
be extended to the interstate port-to-port traffic of domestic water 
carriers, with full power to require all such carriers to file their 
port-to-port rates and to submit reports of their financial and busi¬ 
ness operations. As regards interstate port-to-port traffic the Com¬ 
mission should be given full power to regulate rates and to deter¬ 
mine maximum charges. 

(2) That water carriers be required to file for approval with the 
Interstate Commerce Commission all agreements or arrangements 


RECOMMENDATIONS OF THE COMMITTEE. 


423 


affecting interstate transportation, whether written or oral, and all 
modifications or cancellations thereof, with other water carriers, with 
railroads or other transportation agencies, or with shippers. 

(3) That the carriers be prohibited from granting rebates of any 
kind to shippers and from discriminating between shippers in rates, 
in the giving of space accommodations and other facilities, and in 
the making of unfair contracts based on the volume of freight 
offered. Water carriers should also be prohibited from using fighting 
ships, or deferred rebates, or from threatening or resorting to retalia¬ 
tory or other unfair measures against shippers or competitors. The 
Interstate Commerce Commission should be empowered to adopt 
whatever measures it may consider necessary to protect shippers or 
competitors against such retaliatory methods. Water carriers, if 
cutting rates with a view to dsiving out a competitor, should be 
denied the privilege of restoring rates; and jurisdiction should be 
conferred on the Interstate Commerce Commission to determine 
whether rates were cut with the object of crushing such competitor. 

(4) That the Interstate Commerce Commission be empowered to 
investigate fully all complaints charging unfairness in the'settlement 
of claims, and indifference to the loading and landing of freight in 
proper condition; and to adopt all necessary rules and regulations for 
the adjustment and settlement of claims. 

(5) That as regards all matters relating to Interstate transpor¬ 
tation, all traffic associations or conferences, whether pertaining to* 
through rail-and-water transportation or to port-to-port traffic only, 
be brought under the supervision of the Interstate Commerce Com¬ 
mission. The Committee recommends that the conditions under 
which an outside water carrier is admitted to such associations or 
conferences should be approved by the Commission, and that an out¬ 
side line should not be denied membership for unfair reasons or 
simply because the unanimous consent of existing members of the 
association or conference to the admission of said line cannot be 
obtained. 

(6) That the railroads be prohibited from making the through 
rail-and-water route unprofitable as compared with the all-rail route 
by charging more for the same service on water-borne commodities 
than they charge for the proportionate share of the all-rail haul. 

(7) That the Interstate Commerce Commission be empowered to 
compel railroads to allow competitive water carriers to apply effective 


424 


BEOOMMENDATIONS OF THE COMMITTEE. 


differentials. The Commission should also have full supervisory 
power over divisions between railroads and water carriers as regards 
through rail-and-water rates. The Committee recommends that rate 
divisions on any trade route should be opened equally to all water 
carriers that comply with such conditions of quality and regularity 
of service as the Commission may determine to be reasonable. 

(8) That the railroads and water carriers be required to issue 
through bills of lading to all interstate water carriers that meet 
such conditions of quality and regularity of service as the Interstate 
Commerce Commission may consider reasonable. 

(9) That railroads be required to account separately to the Inter¬ 
state Commerce Commission for the income and expenditures of 
interstate water lines owned or controlled by them. 

(10) That railroads be required to make their terminal facilities 
available to water carriers on equal terms and under such reasonable 
conditions as the Interstate Commerce Commission may prescribe. 
The Committee also believes that the Federal Government should 
pursue a policy of not expending money in the interests of any port 
for harbor or channel improvements, unless that port has efficient 
dock facilities available to all water carriers. 

(11) That there should be legislation providing for equal treat¬ 
ment to all shippers and water carriers by transfer and lighterage 
concerns when forming a link in interstate or foreign commerce. 

(12) That all interstate traffic on canals be placed under the super¬ 
vision of the Interstate Commerce Commission; and that the rail¬ 
roads be prohibited in the future from acquiring, either directly or 
indirectly, ownership and control of or interest in canals, or water 
lines, forwarding companies and other navigation facilities on such 
canals, when the same are used in interstate transportation. 

Kespectfully submitted. 

J. W. Alexander, 

Chairman. 


SUBJECT INDEX. 


A. 

Adjudication of disputes under agreements. (See Arbitration.) 

Admission of new Imes; Page. 

Mediterranean westbound freight agreement of 1911. 80-81 

Passenger conferences.".!!!!. 45 

Advantages of agreements and conferences. (See Agreements in general.). 

Agreements in the American-African trade. 91-102 

North African ports, relations between lines operating to. 100-102 

South and East Africa, practically no return cargo to the United States 

from. 93-94 

West Coast of Africa, agreement between lines operating to the_.*.'***. 97-100 

African Steamship Co.: 

Agreement in the trade to the west coast of Africa, a party to. 98 

Agents: 

Regulation of, through agreements in the passenger traffic.43-44 

Agreements. (See Agreements in general; Agreements, passenger; Agreements, 
freight; Conferences.) 

Agreements (in general): 

Admmistration of passenger agreements. 44-45 

Admission of new lines to passenger conferences. 45 

Advantages of, summarized. 295-303 

Advantages of— 

American and European rates to foreign markets kept on a parity.... 298- 

299,301-302 

Economic distribution of the cost of service. 302-303 

Elimination of weaker lines prevented. 300-301 

Greater security to invested capital in the steamship business and 

advantages resulting therefrom. 297 

Reduction in the cost of service. 302 

Regularity of service. 295-296 

Stability of rates. 297-300 

Uniform rates secured to all merchants. 300 

Agents, regulation of, in the passenger traffic. 43-44 

Allotting the ports of sailing. 284-285 

Alteration of existing passenger agreements, rules governing. 45 

Circulars and publications, regulations concerning the issuance of, in the 

passenger traffic. 42-43 

Competition of nonconference lines in the passenger traffic, methods of 

meeting. 45-46 

Competition between conference and nonconference lines, met through 

agreement. 287-293 

Competition between conference lines, regulated by agreement. 282-286 

Conferences or groups of lines, agreements between. 286 

Contracts with shippers, classification of. 290-292 

Joint contracts by conference lines. 290 

Contracts made by individual members of the conference. 290-291 

Contracts with large shippers at special rates. 291-292 

Corrective measures adopted by lines exceeding their passenger percent¬ 
ages. 40-41 


425 


































426 


SUBJECT INDEX. 


Agreements—Continued. Page. 

Deposits as a guarantee of good faith. 286-287 

Disadvantages of, summarized. 304-307 

Arbitrary determination of rates. 305-306 

Arbitrary increase in rates without due notice to the trade. 306 

Contracts based on large quantities of freight opposed. 307 

Control of shippers who fear retaliation. 306 

Deferred rebate systems opposed... 307 

Failure to publish tariffs or classifications by certain lines opposed -.. 307 

Methods of competition used. 304-305 

Monopolistic nature of conferences and agreements. 304-306 

Possible abuse of monopolistic powers. 304 

Secrecy of conferences and agreements opposed... 307 

Disputes, adjudication of, under passenger agreements... 44-45 

Fighting ships, or collective competition, used by conference lines. 289-290 

Guaranties and penalties adopted for the enforcement of passenger agree¬ 
ments. 42 

Methods of control exercised through agreements, summarized. 281-295 

North Atlantic freight agreements— 

General nature of. 53-57 

Classification of, in the eastbound trade. 55-56 

North Atlantic freight traffic, classification of agreements in the. 59-61 

Number of, in the American foreign trade. 281 

Oral understandings, prevalence of. 293-294 

Pooling agreements (in general). 285-286 

Publicity of agreements. 311-313 

Rate agreements. 282-284 

Differential rate agreements. 283 

Dominant line controls rates in certain trades. 283-284 

Fixed-rate agreements. 282 

Minimum-rate agreements. 282-283 

Restricting the number of sailings of each signatory. 285 

Secrecy of agreements. 2-3, 25, 59, 84, 85, 293-295, 307, 311-313 

Settlements in passenger pool agreements, manner of effecting. 40 

South Atlantic ports, general absence of agreements in the trade from South 

Atlantic ports to Europe. 57-59 

Volume of freight which certain lines may carry limited by agreement.... 285 

Agreements (freight): 

{See also Railroad agreements with steamship lines.) 

Africa. 91-102 

Relations between lines operating to north African ports. 100-102 

Relations between lines operating to south and east Africa. 91-97 

Relations between lines operating to the west coast of Africa. 97-100 

Asia. 109-152 

Calcutta-Pacific Conference agreement. 142-145 

Eastbound and westbound agreements, via Suez. 108-112 

India—• 

Understanding between direct lines to and from New York. 122-124 

Relations among lines operating between United States and India 

via Europe. 124-126 

Agreements in the Japan-Hawaii and Japan-Philippine trade. 141-142 

Java, agreements in the American-Java trade. 127 

Trans-Pacific lines, agreements among the. 128-145 

Trans-Pacific Tariff Bureau, eastbound, threatened disruption of.134-137 

Trans-Pacific Tariff Bureau (Hongkong and China branch).. 128-129,133-134 


Trans-Pacific Tariff Bureau (westbound). 138-139 

Understanding between Pacific Mail Steamship Co. and Toyo Risen 

Kaisha, westbound from San Francisco. 139-141 

Australia. 103-108 

Direct shipments from New York to Australasian ports. 103-105, 282 

Indirect shipments from New York to Australasian ports. 105-106 

Trans-Pacific lines to Australasia. 106-107 

Central America. 191-203 

Conference of West India Atlantic Steamship Cos. 200-203 























































SUBJECT INDEX. 


427 


Agreements (freight)—Continued. Page. 

Europe. 53-90 

Levant, freight agreements among lines in the American-Levant trade. 86-89 
Mediterranean freight agreements— 

Westbound freight traffic agreement of 1911. 78-82 

Eastbound freight agreement. 82-83 

Other Mediterranean freight agreements. 84-85 

North continental— 

Passenger agreement G in its relation to the freight traffic of the 

signatories. 29 

Agreement N in relation to the freight traffic of the Austro-Ameri¬ 
cana. 30-31 

Antwerp, agreement between International Mercantile Marine Co. 

and the Phoenix Line, with reference to. 67-69 

Baltic freight agreements. 71-78, 282 

Channel ports, minimum rate agreements among channel port lines. 70 

Eastbound agreements, nonexistence of. 70-71 

Hamburg-American Line and North German Lloyd, agreement be¬ 
tween, as regards sailings from American ports north of Savannah 

to Hamburg and Bremen. 71 

N. D. L. V. passenger agreement in its relation to the freight traffic 

of the signatories. 28 

N. D. L. V. westbound freight agreement. 65-67, 282, 284 

Northern International Transoceanic Traffic Association.76-77 

Norway, relations between lines operating to and from. 78 

Rotterdam, agreement between Holland-American Line and Rus¬ 
sian East Asiatic Steamship Co., with reference to. 69 

United Kingdom. 61-65 

Minimum eastbound rate agreements. 61-65 

Minimum westbound rate agreements. 65 

Mexico. 189-191,195-203 

South America. 153-188 

Brazil. 154-169 

Agreement between Brazilian conference and River Plate confer¬ 
ence lines to respect each other’s territory. 175 

Brazilian-European agreement. 154-159 

Brazilian-American agreement. 155-159 

Understanding between the Booth Line and the three conference 

lines operating to and from southern Brazil. 169-170 

Colombian ports on the Caribbean Sea, agreements governing traffic to 

and from.176-180 

River Plate—■ 

Agreements in the trade between the United States and the River 

Plate. 170-175 

Agreement between Brazilian conference and River Plate confer¬ 
ence lines to respect each other’s territory. 175 

Understanding among lines operating from New Orleans to the 

River Plate. 171 

Venezuela and Curacao, agreement governing the traffic to and from. 175-176 

West coast of South America via Panama. 180-184 

West coast of South America via the Straits of Magellan. 184-188 

West Indies.•. 

Cuba. 

Jamaica. 214-218 

Trinidad. 218-219 

Martinique, Guadeloupe, Barbados, and Bermuda. 219-225 

Agreements (passenger).- - - - -.-.7,: * ’ * V. ^^ 99 ! 

Barbados, oral passenger-rate agreement between lines calling at. 224 

General classification of.: *'; * * v;* ’ V *; ’i'' V-' T ‘ V. 00 

General nature and purpose of, in the North Atlantic trade. ^2 20 

Mediterranean passenger agreements.; * ‘ nn. 

Mediterranean steerage traffic agreement of 1909. 00 - 0 / 

Special agreement A. 

Special agreement .. 














































428 


SUBJECT INDEX. 


Agreements (passenger)—Continued. Page. 

N. D. L. V. and affiliated passenger agreements. 26-31 

N. D. L. V. agreement. 26-28 

Agreement G. 29-30 

Agreement J. 30 

Agreement L. 28-29 

Agreement N..-.30-31 

North Atlantic trade, chart showing the lines which are parties to passenger 


Trans-Pacific Tariff Bureau, westbound.. 142 

United Kingdom and north European ports, agreements relating to.31-34 

Agreement A A. 31-33 

Agreement W. 33-34 

Agreement V. 34 

Alaska: 

Nome route. 351 

Puget Sound, trade to and from. 351-356 

Southeastern route. 352 

Southwestern route. 351-352 

Steamship consolidations in the trade to and from. 352-356 

Yukon River route. 352 

Alaska Coast Co.: 

Marine interests, extent of. 356 

Pacific Alaska Navigation Co. controls the. 356 

Southwestern Alaska route, service on the. 352 

Alaska Pacific Steamship Co.: 

Pacific coast service of. 347,348 

Pacific Navigation Co., traffic agreement between. 347, 349 

Railroads, relations between. 349 

Rate cutting by the. 350-351 

Alaska Packers’ Association. 354 

Alaska Steamship Co.: 

Humboldt Steamship Co., former traffic relations between. 355 

Juneau Steamship Co., one-half of its capital stock owned by the. 353 

Juneau Steamship Co., traffic arrangement between. 353 

Ketchikan Wharf Co., one-half of its capital stock owned by the. 353 

Marine interests, extent of. 353 

Nome route service. 351 

Northern Navigation Co., traffic arrangement between. 354 

Pacific Coast Steamship Co., former traffic arrangements between. 353 

Southeastern Alaska route, service on the. 352 

Southwestern Alaska route, service on the. 352 

White Pass and Yukon route controlled in part by the. 354-356 

Western Alaska Steamship Co.’s stock to the extent of one-third ownea by 

the. 353 

Alexander & Baldwin (Ltd.): 

Inter-Island Steam Navigation Co. controls. 367 

Matson Navigation Co., Alexander & Baldwin a large stockholder in the... 368 

Allan Line: 

Agreement AA, a party to. 31 

Agreement V, a party to. 34 

Agreement W, a party to. . 33 

Glasgow Conference, a member of. 63 

Liverpool Conference, a member of. 63 

London Conference, a member of. 62 

Philadelphia & Reading Ry. Co., agreement between. 246-247 

American and African Steamship Line, South and East African freight agree¬ 
ment, a party to.. 91 

American-Asiatic Steamship Co., eastbound and westbound Asiatic agreements, 

via Suez, a party to. 111-112 

American Atlantic Conference (freight).59-60 

American Atlantic Conference (passenger). 46-48 

American & Australian Steamsnip Line: 

Direct New York-Australian lines, agreements with. 103 

Wffiite Star Line, agreement with, in the New York-Australasian trade.. 105-106 





















































SUBJECT INDEX. 


429 


American & Cuban Steamship Co.: 

Not a party to any agreement or understanding in the American-Mexican Page. 

trade... 189 

Position in the trade to and from Tampico. 189 

Service between New York and Havana.. 205 

American-Hawaiian Steamship Co.: 

Agreement or understandmg in the American-Mexican trade, not a party 

^ to any. Igg 

Agreements; none with other transportation companies. 357-358 

Hawaiian service of. 365-366 

Marine interests, extent of. 357 

Matson Navigation Co., charter relations between. 366 

New York and Puerto Mexico, nature of service between. 191 

Pacific coast service of. 347 ^ 348 

Panama R. R. Steamship Co., comparison of rates chaiged. 362-363 

Panama Railroad Co., relations between. 363-365 

Tehuantepec National Ry. Co., trafiic agreement between. 357 

Tehuantepec route. 357-358 

America-Leyant Line, position in the American-Levant trade. 85-87 

American Line: 

Agreement L, a party to. 28 

Agreement V, a party to. 34 

Agreement W, a party to. 33 

Liverpool Conference, a member of. 63 

Minimum rate agreement from Channel ports, a party to. 70 

Special agreement A, a party to. 38 

American & Indian Line; represents joint service to and from India of the 

Hansa Line and Bucknall Steamship Lines (Ltd.). 122-124 

American & Manchurian Steamship Line; westbound Asiatic agreement via 

Suez, a party to. 111-112 

American & Oriental Line; eastbound and westbound Asiatic agreements, 

via Suez, a party to. 110-112 

American & Rio Plata Line; River Plate agreement (southbound), a party to .. 170 

Anchor Line: 

Agreement A A, a party to. 31 

Agreement V, a party to. 34 

Agreement W, a party to. 33 

Glasgow Conference, a member of. 63 

Mediterranean steerage agreement of 1909, a party to. 35 

Mediterranean westbound freight agreement of 1911, a party to. 79 

Special agreement A, a party to. 38 

Special agreement B, a party to..... 39 

Anglo-American Oil Co.; eastbound and westbound Asiatic agreements, via 

Suez, a party to. 111-112 

Antwerp; International Mercantile Marine Co. and Phoenix Line, agreement 

between, relative to. 68-69 

Apcar Line; Calcutta-Pacific Conference, a member of. 143 

Arbitration of disputes: 

In general.....• 44-^5 

Agreement between Hamburg-American Line and Royal Dutch West India 

Mail Line in the Haitian tmxle. 213 

Brazilian-American agreement.. 158 

Eastbound and westbound Asiatic agreements, via Suez. 119 

Mediterranean westbound freight agreement of 1911. 81-82 

West coast of Africa trade agreement..• 100 

Arbuckle Bros.; statement concerning discriminatory practices of Brazilian 

Conference lines. 166-168 

Argentina. (See River Plate.) 

Ashley & Dustin Steamer Line. 332 

Asia: ^ ^ * _ _ 

Agreements in the American-Asiatic trade. 109-152 

American trade via the Atlantic compared with trade via the Pacific. 110 

Lines operating between the United States and Asia, via Suez. 110-111 

Atchison, Topeka & Santa Fe Ry. Co.: 

Pacific Mail Steamship Co., through routing arrangement with.. 148 

Replies to Committee’s Schedule of Inquiries relative to agreements with 
navigation companies. 





















































430 


SUBJECT INDEX. 


Atlantic Coast Line R. R. Co.: Page. 

Chesapeake Steamship Co. owned in part by the. 387 

Old Dominion Steamship Co.’s stock owned in part by the. 386 

Peninsular & Occidental Steamship Co. owned in part by the. 388 

Atlantic coastwise trade. {See New England coastwise trade,; Middle and South 
Atlantic coastwise trade; and Gulf coastwise trade.) 

Atlantic Conference (freight). 59-60 

Atlantic Fruit & Steamship Co.: 

American-Mexican trade, not a party to any agreement or understanding in 

the. 189 

New York and Jamaica, service between.214-215 

Nicaragua, position in the trade to and from. 193 

Atlantic & Mexican Gulf Steamship Co.: 

American-Mexican trade, not a party to any agreement or understanding in 

the. 189 

Discontinuance of service from Texas ports to Tampico and Vera Cruz.... 190 

Atlantic, Gulf & West Indies Steamship Lines: 

Eastern Steamship Corporation, relations between. 380 

Lines owned by the. 383-386 

Marine interests, extent of. 369, 384, 385, 403 

Morgan Line, close relations between. 390-391 

Organization of the. 385 

Atlantic Transport Line: 

Agreement V, a party to. 34 

London Conference, a member of. 62 

Minimum rate agreement from Channel ports, a party to. 70 

Austin, Calvin, testimony of, in relation to the relations between the New 

Haven system’s water lines and Eastern Steamship Corporation. 381 

Australasia: 

Agreements in the direct trade from New York to Australasian ports ... 103-105 
Agreements in the indirect trade from New York to Australasian ports.. 105-106 

Relations between the trans-Pacific lines. 106-107 

Return cargo to the United States. 107-108 

Australian Mail Line, discontinuance of regular service in the Australasian 

trade... .. 106-107 

Austro-Americana: 

Agreement N, a party to. 30 

Cunard Line, minimum freight rate agreement between, in the Adriatic 

fre^ht traffic. 85 

Special agreement B, a party to. 39 

B. 

Baldwin Locomotive Works, contract with Brazilian lines. 160 

Baltic freight agreements. 71-78 

Baltimore; railroad agreements with foreign steamship lines at. 246-248 

Baltimore & Carolina Steamship Co.: 

Marine interests, extent of. 383 

Railroads’ refusal to prorate with. 388-389 

Route of... 382, 388 

Baltimore & Philadelphia Steamship Co.: 

Marine interests, extent of. 383 

Route of. 382, 388 

Baltimore Steam Packet Co.: 

Marine interests, extent of. 383, 387 

Route of.. 382 

Seaboard Air Line Railway Co. owns the. 387 

Bank Line: 

Calcutta-Pacific Conference, a member of. 142 

Railroad agreements, none entered into by the. 152 

Trans-Pacific Tariff Bureau (Hongkong and China branch) a member of.. 128 

Trans-Pacific Tariff Bureau (Japan branch), a member of. 131 

Trans-Pacific Tariff Bureau (westbound), a member of. 138 

Barbados: 

Conditions in the trade to and from. 219-222 

Oral passenger-rate agreement between lines calling at.'.. 224 

Relations between the lines in the American-Barbados trade. 223 











































SUBJECT INDEX. 


431 


Barber, H., testimony of, relative to; Page 

Abandonment of deferred rebate system in the South and East African 

trade. 95 

Deferred rebates in the northbound trade from the River Plate. 174 

Barber Asphalt Paving Co., contract with Brazilian lines. 160 

Barber Line: 

Eastbound Asiatic agreements, via Suez, a party to. 110-112 

River Plate agreement (northbound), a party to. 174 

River Plate agreement (southbound), a party to. 170 

Barnes, J. H., testimony of, relative to: 

Great Lakes rates on ore dictated by the United States Steel Corporation. 344-345 
Policy of railroads not to improve the package-freight service on the Great 

Lakes... 33 I 

Policy of the railroads to charge full local rates east of Buffalo to the sea¬ 
board on ex-lake grain. 322 

Railroad control of the Great Lakes package freight....:. 320 

Railroad control of terminals on the Great Lakes. 324 

Reduction of the differential between all-rail and lake-and-rail rates. 330 

Beck, C. J., testimony of, relative to: 

Agreements between Hamburg-American Line and Royal Dutch West 

India Mail Line in the Haitian trade. 214 

Agreements between the Royal Mail Steam Packet Co. and the Hamburg- 

American Line in the West Indian and Central* American trade. 179 

Caribbean Conference. 208 

Relations between the Hamburg-American Line and the New York & Cuba 

Mail Steamship Co. in the trade to and from south Cuban ports. 207-208 

Becker, W. H., manager of various Great Lakes steamship companies. 340 

Belgium; 

Antwerp, agreement between International Mercantile Marine Co. and 

Phoenix Line, with reference to.68-69 

N. D. L. V. westbound freight agreement. 65-67 

Benton Transit Co. 332 

Bering Sea route. 351 

Bermuda: conditions in the trade to and from New York. 222-223 

Bermuda Atlantic Steamship Co., service between New York and Bermuda... 222 

Bingham, R., report relative to the relations between steamship lines operating 

on the west coast of South America. 183 

Boissevain, R. W.j testimony of, relative to: 

Dominant position of the United Fruit Co. in the American-Central Ameri¬ 
can trade. 191-193 

Relations of United Fruit Co. to the Hamburg-American Line and the 

Royal Mail Steam Packet Co. m the Caribbean trade. .... 179 

Boland & Cornelius, managers of various Great Lakes steamship companies_ 340 

Bombay-American Line; represents joint service of the Hansa Line, Bucknall 

Steamship Lines (Ltd.), and Andrew Weir & Co. 125-126 

Booth Line; conference lines operating to and from southern Brazil, tacit 

understanding between. 169-170 

Boston: ‘ 

Agreements between railroads and foreign steamship lines at. 242-246 

Atlantic coastwise services to and from.:. 370 

Boston & Havana Steamship Co.: 

Munson Line acts as agent for. 209 

Service between Boston and Cuba. 208-209 

Boston & Maine R. R. Co.: 

Dominion Line, agreement between. 242, 243 

Furness, Withy & Co., agreement between. 242, 243 

Hamburg-American Line, agreement between. 242, 244-245 

Hamburg-American Line, copy of agreement between. 259-261 

Holland-American Line, agreement between. 242, 243-244 

Boston & Yarmouth Steamship Co.: 

Eastern Steamship Corporation acquires the. 378 

Marine interests, extent of. 378 

Bouvier, M., testimony of, relative to: 

Relations between lines operating between New York and the west coast of 

South America, via the Straits of Magellan..... 185-186 

United States Steel Corporation receives special rates in the trade to the 
west coast of South America. 137 









































432 


SUBJECT INDEX. 


Bray, J. P., report of, relative to agreement between Pacific lines operating Page. 

from Australia to the United States. 108 

.Brazil: 

Agreements in the American-Brazilian trade. 154-169 

Agreement between Brazilian Conference and River Plate Conference 

lines to respect each other’s territory. 175 

American and European rates on a parity... 168-169 

Conferences governing the trade to and from the United States. 150-160 

Contracts with shippers in the American trade. 160 

Deferred rebates in the trade, northbound. 160-168 

Volume of cargo, northbound. 162 

British & African Steam Navigation Co.; agreement in the trade to the west 

coast of Africa, a party to... 98 

Brown, A. G., report relative to relations between the Pacific Mail, Kosmos, and 

Jebsen Lines. 198 

Brunswick; agreement be'tween the Southern Ry. Co. and F. D. M. Strachan 

with reference to. 249 

Bryan, C. P., report of, on underweighing of freight by Japanese lines. 135 

Buckland, E. G.; testimony of, relative to: 

Eastern Steamship Corporation’s acquisition of the New England Naviga¬ 
tion Co.’s marine interests. 379 

Long Island Sound lines, reasons why the New Haven System acquired 

the.*.. 377-378 

Bucknall Steamship Lines (Ltd.): 

Hansa Line, agreement between in the trade to and from India. 122-124 

South and East African freight agreements, party to. 91 

Bull, A. H.: 

Connection with the Porto Rican trade. 227-233 

Testimony of, relative to 10-year bond to remain out of the Porto Rican 

trade, signed by him. 227-229 

Bull (A. H.) Steamship Co.: 

Insular Line, rate war between. 229-233 

Maine Central R. R. Co. refuses to make a traffic arrangement with the_ 401 

New York & Porto Rico Steamship Co., rate war between. 229-233 

Protects itself with long-term contracts in the Porto Rican trade. 238 

Service to Porto Rico. 226 

C. 

Calcutta. (See Calcutta-Pacific Conference.) 

Calcutta-Pacific Conference. 142-145 

“Calcutta Lines.” (See Calcutta-Pacific Conference.) 

California-Atlantic Steamship Co.: 

Marine interests, extent of. 358 

Panama Railroad Co., traffic arrangement between.;. 363-364 

Panama service of. 358 

Canada, W.; report relative to relations between the New York & Cuba Mail 

Steamship Line and trans-Atlantic lines operating to and from Mexico_ 190 

Canadian-Australian Royal Mail Steamship Line, Australian service of. 106-107 

Canadian Pacific Ry. Co.: 

Agreement AA, a party to.. 31 

Agreement J, a party to. 30 

Agreement V, a party to. 34 

Agreement W, a party to. 33 

Liverpool Conference, a member of. 63 

London Conference, a member of. 62 

Canadian Pacific Ry. Co.’s Royal Mail Line: 

Calcutta-Pacific Conference, a member of. 142 

Trans-Pacific Tariff Bureau CHongkong & China branch), a member of_ 128 

Trans-Pacific Tariff Bureau ^Japan branch), a member of. 131 

Trans-Pacific Tariff Bureau (westbound), a member of. 138 

Canals, railroad control of. 408 

Capital invested in the steamship business, greater security resulting from 

agreements and conferences. 297 

Caribbean Sea. (See various countries.) 








































SUBJECT INDEX. 


433 


Central America: Page. 

Agreements in the trade to and from. 191-203 

Conference of West India Atlantic Steamship Cos. 200-203 

Relations between lines operating between New York and the west coast of. 195 

Relations between lines operating between Pacific coast ports of the United 

States and the west coast of.•_ 196-200 

Centra] of Georgia Ry. Co., Ocean Steamship Co. owned by the. 387 

Central Vermont Transportation Co. 381, 383 

Chartering of vessels: 

Atlantic coastwise trade, difficulty of, in the. 392-393 

Porto Rican trade, difficulty of chartering in the. 229-230 

Che^eake & Ohio Ry. Co.: 

Hamburg-American Line, copy of agreement between. 261-264 

Old Dominion Steamship Co.’s stock owned in part by the. 386 

United States Shipping Co., agreement between. 248-249 

Chesapeake & Ohio Steamship Co.: 

Liverpool Conference, a member of. 63 

London Conference, a member of. 62 

Chesapeake Steamship Co.: 

Atlantic Coast Line R. R. Co. owns part of stock of the. 387 

Route of.:. 382 

Southern Ry. Co. owns part of stock of the. 387 

Chicago Harbor Commission; report relative to railroad control of the Great 

Lakes package freight service. 320 

Chicago, Milwaukee & St. Paul Ry. Co.; Osaka Shosen Kaisha, agreement 

between. 150-151 

Chicago, Milwaukee & St. Paul Ry. System; Osaka Shosen Kaisha, copy of 

agreement between. 278-279 

Chicago, Racine & Milwaukee Line. 332 

Chicago & South Haven Steamship Co. 331, 333 

Chilean Steamship Line; Pacific Steam Navigation Co. and Peruvian Steam¬ 
ship Line, relations between. 182-184 

China Mutual Steam Navigation Co.: 

Calcutta-Pacific Conference, a member of. 142-143 

Northern Pacific and Great Northern Ry. Cos., agreement between. 148-150 

Northern Pacific and Great Northern Ry. Cos., copy of agreement 

between. 276-277 

Trans-Pacific Tariff Bureau fHongkong & China branch), a member of... 128 

Trans-Pacific Tariff Bureau (Japan branch), a member of. 131 

Trans-Pacific Tariff Bureau (westbound), a member of. 138 

Cleveland & Buffalo Transit Co.: 

Cleveland & Toledo Line, a half interest owned by the.. 332 

Service of. 331, 332 

Cleveland & Toledo Line, owned by the Cleveland & Buffalo Transit Co. and 

Detroit & Cleveland Navigation Co. 332 

Cleveland Cliffs Iron Co., manager of various Great Lakes steamship com¬ 
panies. 340 

Clyde Steamship Co.: 

A. G. W. I. controls the. 384 

Caribbean Conference, a member of. 208 

Lines to Haiti, no agreement between. 212 

Marine interests, extent of.-. 383, 384 

Only line in the American-Santo Dominican trade. 212 

Routes of. 382 

Services of the.• • 385 

Coastwise Freight Conference: 

Membership of. 396 

Purposes oL. 396-397 

Seaboard & Gulf Steamship Co. refused membership in the... 397-398 

Colombia; agreements governing the traffic to and from ports on the Caribbean 

Sea.. 176-180 

Colonial Navigation Co. 381 

Columbia River, lines on the. 408 

Commissioner of Corporations: 

Report on the coastwise steamship line seiwice to and from New York- 370 

Report on railroad control of terminals at Chicago, Duluth, and Buffalo. 323-324 
Report on methods of competition used by transcontinental railroads 

against the Panama route... 360 

Report on the routes between leading Atlantic and Gulf ports. 370 

25655°—VOL 4—14-28 
















































434 


SUBJECT INDEX. 


Commissions to agents, regulation of: Page. 

Eastbound and westbound Asiatic a^eements, via Suez. 115 

Mediterranean steerage agreement of 1909. 30 

Communications between lines, regulation of: 

Eastbound and westbound Asiatic agreements, via Suez. 115 

Mediterranean westbound freight agreement. 82 

Compagnie Gen^rale Transatlantique: 

Agreement G, a party to. 29 

Agreement L, a party to. 28 

Agreement V, a party to. 34 

Agreement W,^ a party to. 33 

Channel ports,’ minimum rate agreement from, a party to. 70 

Conference of West India Atlantic Steamship Companies, a party to. 200 

Special agreement A, a party to. 38 

Compania Maritima Cubana: 

Munson Line acts as general agent at New York. 206 

New York & Cuba Mail Steamship Co. a stockholder in the. 206 

New York & Cuba Mail Steamship Co., former agreement between, for a 


Service to norl^h Cuban ports. 206 

Compania Transatlantica: 

Conference of West India Atlantic Steamship Companies, a party to. 200 

Pinillos Line, agreement between. 84-85 

Competition: 

See also Rate wars; Fighting ships; and Rates, determination and main¬ 
tenance of. 

Atlantic-Gulf coastwise trade, methods of, used in the. 392-398 

Competition between conference lines, regulation of, through agreements. 282-286 
Competition between conference and nonconference lines, met through 


Contracts with shippers, through. 290-292 

Disadvantages of, in the steamship business.. 300-301 

Fighting ships, or collective competition. 289-290 

Manner of meeting and restricting, under the eastbound and westbound 

Asiatic agreements, via Suez. 117-119 

Railroad competition with water lines on inland waterways. 406-408 

Conferences (in general): 

See also Conferences; Agreements, in general. 

Advantages of. 295-303 

Disadvantages of. 304-307 


Conferences: 

American Atlantic Conference (in the North Atlantic passenger traffic) ... 46-48 

American Atlantic Conference (freight). 59-60 

Atlantic Conference (freight). 59-60 

Asiatic trade— 

Calcutta-Pacific Conference. 142-145 

Hongkong Conference. 121-122 

London Conference. 121-122 

' New York Conference. 121-122 

Singapore Conference. 121-122 

Trans-Pacific Tariff Bureau (Hongkongaud China branch).. 128-129,133-134 


Trans-Pacific Tariff Bureau (westbound). 138-139 

Australian Conference, of direct lines from New York. 105 

Brazilian trade— 

London Conference. 159-160 

New York Conference. 159-160 

Caribbean Conference. 208 

Conference of West India Atlantic Steamship Cos. 200-203 

Continental Conference (in the North Atlantic passenger trade). 46-48 

Glasgow Conference (freight). 61-65 

Liverpool Conference (freight). 61-65 

London Conference (freight).61-65 

London Conference (south and east African trade). 95 

Manchester Conference (freight). !.!.!! 61-65 

Mediterranean Conference (freight). 59-60 


















































SUBJECT INDEX. 


485 


Conferences—Continued. Page. * 

Mediterranean Conference (in the North Atlantic passenger traffic). 46-48 

New York Committee (south and east African trade). 95 

North Atlantic Conference (in the North Atlantic passenger tratlic). 46-48 

River Plate trade, in the. 170 

South African Homeward Conference. 95-96 

South African Outward Conference. 95-96 

Trans-Atlantic Freight Conference.59-60 

Consolidations among foreign steamship lines. 301 

Continental Conference (passenger).46-48 

Contracts with shippers: 

African trade (south and east). 96-97 

Asiatic trade, eastbound and westbound agreements, via Suez. 116 

Brazil trade, in the. 160 

Classification of such contracts. 290-292 

Contracts based on large quantities of freight opposed as discriminating in 

character. 307 

Contracts by individual conference lines. 290-291 

Joint contracts by conference lines. 290 

New York-west coast of South America trade, via Straits, of Magellan 

(southbound). 186-187 

Porto Rican trade. 236-238 

River Plate trade. 172-174 

Special rates on contracts with large shippers. 291-292 

Cost of service, reduced through agreements and conferences. 302 

Creole Line, relation to Mediterranean conference lines. 84 

Crosby Transportation Co. 331-332 

Cuba: 

Agreement between the Munson Line and the Mobile & Ohio and Southern 

Ry. Cos., with reference to the Mobile-Cuba trade. 253 

Gulf Foreign Freight Committee. 209-212 

Rate arrangements in the American-Cuban trade. 205-212 

Cuban Line, Conference of West India Atlantic Steamship Cos., a party to_ 200 

Cunard Steamship Co.: 

Agreement AA, a party to. 31 

Agreement V, a party to. 34 

Agreement W, a party to. ,33 

Austro-Americana, minimum freight rate agreement with, as regards 

Adriatic freight traflic. 85 

Channel ports, minimum rate agreement from, a party to. 70 

Levant-American trade, party to agreement for regulation of this trade- 87 

Liverpool Conference, a member of. 63 

London Conference, a member of. 62 

Mediterranean Conference lines, relation to. 84 

New York Central & Hudson River R. R. Co., agreement between. 242, 245 

Special agreement B, a party to. 39 

Curacao, agreement governing the traffic to and from. 175-176 

Curtis, F. K., Insular Line owned by. 226 

D. 

Dalles, Portland & Astoria Navigation Co. 408 

• Daniels, Lorenzo, testimony of, relative to: 

American and European rates on a parity as regards Brazil. 168-169 

Contracts with shippers in the River Plate trade.. 173 

Parity of American and European rates in the River Plate trade. 171 

Tacit understanding between the Booth Line and Brazilian conference 

lines... 170 

Deferred rebates (in general) {see also Deferred rebates): 

Arguments against. 163-168 

Arguments in favor of. 161-163 

Deferred rebate systems in general. 287-289 

Effectiveness of.-. 163-168 

Effect of, in the trans-Pacific trade. 129 

General attitude of independent steamship interests concerning. 313-314 

General attitude of steamship interests concerning. 313-314 

Necessity of, in long-distance trades. 54—55 

Opposition to. 307 






















































43G 


SUBJECT INDEX. 


Deferred rebates: _ Page. 

African trade, west coast of Africa, none existing in the. 100 

African trade (South and East), none in the... 95 

Asiatic agreements, eastbound and westbound, via Suez. 117-119 

Atlantic-Gulf coastwise trade. 395-396 

Bermuda trade to and from New York. 222-223, 288 

Brazil— 

Brazil-American and European trade. 287-288 

Brazilian trade (northbound), in the. 157-158, 160-168. 

In the Brazil-European trade. 157-158 

None in the trade to. 157 

Calcutta-Pacific Conference...-. 144-145 

Conference of West India Atlantic Steamship Companies..200, 201, 203 

Harrison Direct Line’s rebate circular in the United Kingdom-British Co¬ 
lumbian and Puget Sound trade. 90 

Jamaican trade. 215, 288 

Martinique and Guadeloupe trade. 219-222,288 

Mediterranean freight agreement of 1911. 54, 79-80 

New York-Colombian trade, both northbound and southbound. 178-179, 288 

New York-Kingston (Jamaica) trade. 288 

North Atlantic trade, not necessary in the. 54 

River Plate-European trade. 172 

River Plate trade, northbound. 174-175 

Trans-Pacific Tariff Bureau (Hongkong and China branch), none in connec¬ 
tion with. 133-134 

Trans-Pacific Tariff Bureau (Japan branch). 131-132 

Trinidad trade. 218 

United Kingdom, in the trade between the United Kingdom and Puget 

Sound ports. 89-90, 288 

Delaware, Lackawanna & Western Railroad Co., Mutual Transit Co. controlled 

in part by the.... 317, 318 

Department of State, circular submitted to American diplomatic and consular 

officers, under date of April 17, 1912. 16-17 

Deposits as a guarantee of good faith: 

In general. 42 

Mediterranean westbound freight agreement. 81, 286-287 

Detroit & Cleveland Navigation Co. 331, 333 

Diederich, H. W., report of, relative to the port of Antwerp. 68-69 

Differential rate agreements. 283 

Differentials: 

Great Lakes, between lake-and-rail and canal-and-lake rates and all-rail 

rates. 328-331 

Middle and South Atlantic coastwise trade, in the. 389 

Direct Navigation Co., Southern Pacific Co. owns the. 390 

Disadvantages of agreements and conferences. {See Agreements, in general, 
disadvantages of.) 

Discrimination, elimination of, by Government supervision. 313-314 

Discrimination in rates. {See Rates, American and European rates to foreign 
markets on a parity, Contracts with shippers.) 

Division of territory between Royal Mail Steam Packet Co. and Hamburg- 

American Line in the West Indian and Central American trade. 178 

Dollar Steamship Co. not affiliated with other trans-Pacific lines. 128-129 

Dodwell Line; westbound Asiatic agreement, via Suez, a party to. 110-112 

Dominion Line: 

Agreement V, a party to. 34 

Agreement W, a party to. 33 

Boston & Maine Railroad Co., agreement between. 242, 243 

Donaldson Line: 

Agreement W, a party to. 33 

Agreement with railroads at Newport News and Norfolk, a party to. 248-249 

Glasgow Conference, a member of. 63 

Traffic arrangement with railroads centering at Baltimore. 247-248 

Doty, W. F., report on the Northern International Transoceanic Traffic Asso¬ 
ciation. 76-77 
















































SUBJECT INDEX. 


487 


E. 

Eastern Steamship Co.: Page. 

Eastern Steamship Corporation acquires the. 378 

Marine interests, extent of. 378 

Eastern Steamship Corporation: 

Affiliations with otner navigation interests. 379-380 

A. G. W. I., relation between. 380 

Boston & Yarmouth Steamship Co. acquired by the. 378 

Eastern Steamship Co. acquired by the. 378 

Line services of the. 378-379 

Maine Steamship Co. acquired by the. 378 

Marine interests, extent of. 3G9, 372, 378, 380,403 

Metropolitan Steamship Co. acquired by the. 378 

New England coastwise trade, dominant position of, in the. 380-381 

New England Navigation Co.’s marine interests acquhed by the. 379 

New York, New Haven & Hartford Railroad Co., relations between. 379-380,381 
Elder Dempster Line: 

Agreement in the trade to the west coast of Africa, a party to. 98 

Harrison and Leyland Lines operating in harmony with. 57-58 

Ellerman Line, Levant-American trade, party to agreement for regulation of 
this trade. 87 


Erie Canal: 


Forwarding agencies acquired by the railroads. 325-326 

New York Canal Forwarders’ Association. 326 

Railroad control of terminal facilities at Buffalo and New York. 327-328 

Railroad control of the. 324-328,408 

Railroad influence over rates on the. 326-327 

Railroads obtain control of canal boat lines. 325-326 

Through bills of lading^ absence of, via the canal. 327 

Through traffic, volume of. 325 

Erie Railroad Co.: 


Erie Railroad Transit Line operated by the.317, 318 

Mutual Transit Co. controlled in part by the. 317, 318 

Erie Railroad Transit liine, Erie Railroad Co. operates the. 317,318 

Erie & Western Transportation Co., Pennsylvania Railroad and Northern Cen¬ 
tral Railway Co. control the.. 317, 318 

Escanaba & Gladstone Transportation Co. 331-333 

Europe. {See Agreements (freight), Europe; Agreements (passenger); Con¬ 
ferences.) 

F. 


Fabre Line: 

Mediterranean conference lines, generally adheres to the rates of. 84 

Mediterranean freight agreements, not a party to. 78, 84 

Mediterranean freight conference, a member of. 84 

Mediterranean steerage agreement of 1909, a party to. 35,36 

Mediterranean steerage agreement of 1911, not a party to. 37 

.,. 289-290 

Atlantic-Gulf coastwise trade, use of, in the. 393-394 

N. D. L. V. westbound freight agreement, in connection with. 66 

North Atlantic passenger traffic, use of, in the. 45-46 

Fixed rate agreements.-. V-'W' 

Florida East Coast Railway Co., Peninsular & Occidental Steamship Co. 

owned in part by the. 388 

Franklin, P. A. S., testimony of, relative to: 

Filing of rates.%. at '' 

Friendly relations between foreign steamship lines operating from New 

Orleans and Galveston. 58-59 

Minimum rate agreement from the Channel ports. 70 

N. D. L. V. westbound freight agreement. 67 

Publicity of agreements. 312 

Rates in the eastbound trade to the United Kingdom. 64 

Funch, Edye & Co.: 

Aransas Channel & Dock Co., agreement between... -... 

Louisville & Nashville Railroad Co., agreement between, with reference^ 
to Pensacola. 

















































438 


SUBJECT INDEX. 


Furness Line: Page. 

Liverpool Conference, a member of. 63 

London Conference, a member of. 62 

Furness, Withy & Co.: 

Agreement with railroads at Newport News and Norfolk, a party to.. . 248-249 

Boston & Maine Railroad Co., agreement between. 242, 243 

Northern Central Railroad, agreement between. 247 

Philadelphia & Reading Railway Co., agreement between. 246-247 

G. 

Galveston; _ 

An open port... 239, 250 

Relations between foreign lines operating to Europe. 57-58 

Garrels, A., report of, relative to the Egyptian trade. 101-102 

Gerhard, Paul, testimony of, relative to: 

American and European rates in the River Plate trade, parity of. 171-172 

London Conference in the American-Brazilian trade. 160 

River Plate Confeience in the southbound trade.- 170-171 

River Plate conference and Brazilian conference lines, understanding 

between, to respect each other’s territory... 175 

South and East African agreement.-. 92 

German-Australian Steamship Co., Hansa Line, agreement between, in the 

American-Java trade. 127 

Gilchrist Transportation Co. 338, 341, 342 

Glasgow Conference (freight). 61-65 

Goodrich Transit Co.. 331, 333 

Gettheil, Paul, testimony of, relative to: 

Agreement between Hamburg-American Line and North German Lloyd as 
regards sailings from American ports north of Savannah to Hamburg and 

Bremen. 71 

American-Java trade, development of. 127 

Baltic pool agreements. 74 

Brazilian trade northbound, volume of. 162 

Determination and maintenance of rates in the New York-Australian trade. 104 
Punch, Edye & Co. and the Aransas Channel & Dock Co., agreement 

between. 257 

Punch, Edye & Co., and the Louisville & Nashville Railroad Co., agreement 

between. 257 

Panama Railroad & Steamship Co.’s relation to the Caribbean Conference.. 208 

Parity of American and European rates to south and east Africa. 95 

Publicity of agreements. 312 

Railroads and foreign steamship lines at New York, agreements between.. 241-242 

Rates and traffic in the direct trade from New York to India. 123-124 

Venezuela and Curacao, lates in the traffic to and from. 176 

Government regulation relative to; 

Carriers engaged in the American-foreign trade. 307-308 

Discrimination, elimination of, between shippers.. 313-314 

Publicity of agreements. 311-313 

Rates, impracticability of filing and requiring a period of notice before 

changing the same. 309-311 

Government suit against Hamburg-American Line et al. 25 

Graham & Morton Transportation Co. 331-333 

Great Lakes: 

Affiliations of lines on the. 317-346 

Bulk carriers, affiliations between. 341-346 

Bulk carriers, consolidations of. 336-346 

Bulk carriers, tendency toward consolidations among the. 337-341 

Differentials between all-rail and lake-and-rail and canal-and-lake rates. 328-331 

Erie Canal, control of by the railroads. 324-328 

Lines, number of, on the. 404 

Nonrailroad lines— 

Enumeration of. 331-336 

Rates charged by. 335-336 

Routes of. 335-336 

Railroad attempt to secure control of the through-grain movement. 320-323 

Railroad control of terminals at Buffalo which independent lines are refused 
access to. 323-324 














































SUBJECT INDEX. 


489 


Great Lakes—Continued. rage. 

Railroad control of through-package freight. 317-331 

Railroad control of through lake lines and canal forwarding agencies, 

effects of. 328-331 

Railroad-owned lines— 

Enumeration of. 317-319 

Extent of. 401, 405 

Relations between. 330 

Railroads’ policy not to improve the package freight service on the. 330-331 

Railroads’ policy to charge full local rates from Buffalo to the seaboard on 

ex-lake grain. 320-323 

Railroads prevent competition in through-package freight business, methods 

used. 319-331 

Rates, lake-and-rail and canal-and-lake rates compared with all-rail rates. 328-331 
Tendency toward improved steamers, improved loading and unloading 

facilities, and lower rates in the bulk traffic. 336-337 

Great Lakes Towing Co. 340-341 

Great Northern Railway Co.: 

China Mutual Steamship Co., agreement between. 148-150 

Great Northern Steamship Co. owned by the. 152 

Holt, Alfred, & Co. (representing the Ocean and China Mutual Steamship 

Cos.), copy of agreement between. 276-277 

Nippon Yusen Kaisha, agreement between. 151-152 

Nippon Yusen Kaisha, copy of agreement between. 279-280 

Ocean Steamship Co., agreement between. 148-150 

Great Northern Steamship Co.: 

Calcutta-Pacific Conference, a member of. 143 

Great Northern Railway Co. owns the. 152 

Trans-Pacific Tariff Bureau (Japan branch), a member of. 131 

Trans-Pacific Tariff Bureau (Hongkong and China branch), a member of.. 128 

Groves, F. S., testimony of, in relation to: 

Chartering and purchasing of vessels, difficulty of..._..^.^- 392-393 

Employment of individuals in his line’s service to divulge information- 394 

Fighting ships, use of, in the Atlantic-Gulf coastwise trade. 393 

Marine insurance companies’ discrimination against his line. 395 

Philadelphia & Gulf Steamship Co. refused membership in the Southwest¬ 
ern Freight Committee... 397 

Rebates, granting of, in the Atlantic-Gulf coastwise trade. 395-396 

Stock subscriptions of his line, opposition to. 392 

Guadeloupe, condTitions in the trade to and from.219-222 

Guarantees of good faith: 

Calcutta-Pacific Conference . 145 

Mediterranean westbound freight agreement. 81, 286-287 

Passenger agreements. 42 

Gulf coastwise trade. 389-398 

A. G. W. I. and Morgan Lines, close relations between..... 389-391 

Competition, methods of, used against independent lines in the. 392-398 

Independent steamship lines in the. 391-392 

Lines, enumeration and description of. 389 

Lines, number of, in the. 404 

Railroads’ refusal to prorate with independent lines in the. 400-401 

Railroads and steamship lines, traffic relations between. 398-401 

Gulf Foreign Freight Committee. 209-212 

Gulf Steamship Co.: ono 

Fighting ships, use of, by the.’^93 oJ4 

Southern Pacific Co. owns the. 390 

H. 

Hagemeyer Trading Co., R. P. Houston & Co., contract between, in the River 

Plate trade. 172-173 

Haines, H. H., testimony of, relative to: ooc 

Rates in the Galveston-Porto Rican trade.-...- -. 

Relations between foreign lines operating from Galveston to Europe. ... 57-58 
Haiti, agreement between Hamburg-American Line and Royal Dutch \\ est 

India Mail Line, relative to. -^4 














































440 


SUBJECT INDEX. 


Halm, W. E., testimony of, relative to: Page. 

South and East African agreement. 02 

American and European rates to South and East Africa, parity of. 94-95 

American and European rates in the River Plate trade, j)arity of. 172 

Contracts with shippers in the River Plate trade. 173 

Hamburg-American Line: 

Agreement AA, a party to. 31 

Agreement G, a party to. 29 

Agreement L, a party to. 28 

Agreement J, a party to. 30 

Agreement N, a party to. 30 

Agreement V, a party to. 34 

Agreement W, a party to... 33 

Agreement between southern railroad companies at Newport News and 

Norfolk and the United States Shipping Co. 248-249 

Agreement in the trade to the west coast of Africa, a party to. 97 

Baltic pool a.greements, a party to.... 72 

Booth Line, tacit understanding between, as regards the Brazilian trade.. 169 

Boston & Maine Railroad Co,, agreement between. 242, 244-245 

Boston & Maine Railroad Co., copy of agreement between. 259-261 

American-Brazilian agreement, a party to. 154 

Brazilian-European agreement, a party to. 154 

Caribbean Conference, a member of. 208 

Chesapeake & Ohio, Norfolk & Western, and Southern Railway Cos., copy 

of agreement between. 261-264 

Conference of West India Atlantic Steamship Companies, a member of_ 200 

Mediterranean steerage agreement of 1909, a party to. 35 

Mediterranean westbound freight agreement of 1911, a party to... 79 

N. D. L. V. and affiliated passenger agreements, a party to. 26 

N. D. L. V. westbound freight agreement, a party to. 65 

New York & Cuba Mail Line, former rate understanding between, in the 

New York-Cuban trade. 206 

New York & Cuba Mail Line relations between, in the south Cuban 

trade.; 207-208 

Northern International Transoceanic Traffic Association, a member of. 76 

North German Lloyd, agreement with, as regards sailings from American 

ports north of Savannah to Hamburg and Bremen. 284, 71 

Philadelphia & Reading Railway Co., agreement between. 246-247 

Royal Dutch West India Mail Line, agreement between, in the New York- 

Haitian trade. 212-214 

Royal Mail Steam Packet Co., agreements between, as regards the Central 

American and West Indian traffic. 177-179 

Royal Mail Steam Packet Co., agreement between, with respect to Haiti.. 214 

Royal Mail Steam Packet Co., agreement between, with reference to Haiti 

and Santa Marta. 284 

Royal Mail Steam Packet Co. and United Fruit Co., relations between, in 

the Jamaican trade. 215-218 

Service to south Cuban ports. 207 

Special agreement A, a party to. 38 

Special agreement B, a party to. 39 

Trinidad ports not served owing to agreement with the Royal Mail Steam 

Packet Co. 218 

United Fruit Co., rate understanding between, in the Caribbean 

trade...^. 176-177,179-180 

West Coast of South America via Panama, rate understanding in the trade 

to and from, a party to. 180-181 

Hamburg-Bremen-African Line, agreement in the trade to the west coast of 

Africa, a party to. 97 

Hamburg-South American Steamship Co., American-Brazilian agreement, a 

party to. I 54 

Hanna & Co., M. A.] 339 , 341 , 342 

Hansa Line: 

Bucknall Steamship Lines (Ltd.), agreement between, in the trade to and 

from India. 122-124 

German-Australian Steamship Co., agreement between, in the American- 

Java trade. 127 

South and East African freight agreement, a party to. 91 















































SUBJECT INDEX. 


441 


Harrison Direct Line, defeped rebate circular covering the trade between the Page. 

United Kingdom and British Columbian and Puget Sound ports. 90 

Harrison Line: 

Conference of West India Atlantic Steamship Companies, a party to. 200 

Elder Dempster and Leyland Lines, operating in harmony with. 57-58 

Hartford & New York Transportation Co., marine interests, extent of. 374 

Hawaii, agreements in the Japan-Hawaiian trade. 141-142 

Hawaiian trade...!.!.! 365-368 

Interisland trade of Hawaii.!.!!!!!!!!!*.!.. 367 

Lines in the trade, enumeration of. !.!.!.!.! 365-366 

Lines in the trade, relations between. 367-368 

Uayne, D. H., testimony of, in relation to the trust agreement governing the 

voting of the Merchants & Miners Transportation Co.’s stock. 375-377 

Hill Steamboat Line. 331 333 

Hinckley, T., report relative to the relations betw'een the Pacific Mail, Kosmos, * ' 

and Salvador Railway Lines. 198 

Hitch, A. D., testimony of, relative to the relations between lines operating 
between New York and the west coast of South America, via the Straits of 

Magellan. 185-186 

Holland: 

N. D. L. V. westbound freight agreement. 65-67 

Rotterdam, agreement between Holland-American Line and Russian East 

Asiatic Line, with reference to. 69 

Holland-American Line: 

Agreement A A, a party to. 31 

Agreement G, a party to. 29 

Agreement J, a party to. 30 

Agreement L, a party to. 28 

Agreement N, a party to. 30 

Agreement V, a party to. 34 

Agreement W, a party to. 33 

Agreement with railroads at Newport News and Norfolk, a party to. 248-249 

Boston & Maine Railroad Co., agreement between. 242, 243-244 

International Mercantile Marine Co. partly owns the. 71 

Minimum rate agreement from Channel ports, a party to. 70 

N. D. L. V. and affiliated passenger agreements, a party to. 26 

N. D. L. V. westbound freight agreement, a party to. 65-67 

Philadelphia & Reading Railway Co., agreement between. 246-247 

Russian East Asiatic Lme, agreement between, with reference to Rotter¬ 
dam. 69, 284 

Holt, Alfred, & Co., Northern Pacific and Great Northern Railway Cos., copy 

of agreement between. 276-277 

Hopkins, W. M., testimony of, in relation to: 

Railroads policy of charging full local rates from Buffalo to the seaboard 

on ex-lake grain. 321-322, 322-323 

Railroad control of terminals on the Great Lakes. 324 

Reduction in the difference between all-rail and lake-and-rail rates. 330 

House resolution No. 425 (62d Cong., 2d sess.), copy of. 8 

House resolution No. 587 (62d Cong., 2d sess.), copy of. 9-10 

Houston & Brazos Valley Railroad Co., Seaboard & Gulf Steamship Co., rela¬ 
tions between. 391-392 

Houston & Co., R. P., Hagemeyer Trading Co., contract between in the River 

Plate trade. 172-173 

Houston Line: 

South and East African freight agreement, a party to. 91 

River Plate agreement (southbound), a party to. 170 

Agreement in the River Plate northbound trade, a party to. 174 

Howard, H. C., report relative to the relations between steamship lines oper- ^ 

ating on the west coast of South America. 183,187 

Hubbard-Zemurray Steamship Co.: 

Service between Mobile and Spanish Honduras. 193 

United Fruit Co., relations between. 193 

Hudson River, relations between railroads and steamship lines on the. 408 

Humboldt Steamship Co.: . 

Alaska Steamship Co., former traffic relations between. 355 

Southeastern Alaska route, service on the. ;•/*"/' W '' V 

White Pass and Yukon route, no joint rates enjoyed by the Humboldt Co. 

ovpr the 355-356 

Hutehineon & Co. 339,341,342 



















































442 


SUBJECT INDEX. 


I. 

Independent Steamship Co.: Page. 

Pacific coast service of.*.. 347, 348 

Railways, relations between... 349 

India: 

Indirect traffic between the United States and India, via Europe.124-126 

Understanding between direct lines from and to New York. 122-124 

Indiana Transportation Co... 331, 333 

Indo-China Steam Navigation Co.; Calcutta-Pacific Conference. 143 

Inland waterways; decline of steamship lines on the.. .. 406-408 

Inland Waterway Commission; report relative to railroad competition with 

water lines on the Mississippi River. 407 

Insular Line: 

Bull Steamship Co., rate war between, in the Porto Rican trade. 229-233 

New York & Porto Rico Steamship Co., relations between. 229, 233-235 

Peck (W. E.) & Co., relations between. 228 

Red “D” Line, former rate war between, in the Porto Rican trade. 228-229 

Service to Porto Rico.- - -. 226 

Intercoastal trade (between Atlantic and Pacific seaboards of the United 

States). 357-365 

Intercoastal lines, traffic arrangements between. 363-365 

Traffic, volume of. 358-360 

Transcontinental railroads, methods of competition used against the 

Panama route. 359-361 

Transcontinental rates, influence of intercoastal water carriers upon.... 361-363 
Inter-Island Steam Navigation Co.: 

Alexander and Baldwin controlled by the. 367 

Marine interests, extent of. 367 

Matson Navigation Co., affiliations between. 367-368 

Wilder Steamship Co. owned by the. 367 

International Harvester Co.; contracts in the South and East African trade- 96 

International Mercantile Marine Co.’s Lines: 

Agreement AA, a party to. 31 

Antwerp, agreement with Phoenix Line relative to the port of.68-69 

Holland-American Line partly owned by the. 71 

Red Star Line controlled by the. 71 

Isthmian Steamship Line; eastbound and westbound Asiatic agreements via 

Suez, not a party to. 111-112 

Italian Chamber of Commerce in New York; report on freight rates to and from 

the United States. 83 

Italian Lines: 

Mediterranean steerage agreement of 1909, parties to. 35 

Mediterranean westbound and eastbound freight agreements, parties to... 79 

Special agreement A, parties to. 38 

Special agreement B, parties to. 39 

J. 

Jaffray, R., testimony of, relative to the relations of lines operating between 

New York and the west coast of South America via the Straits of Magellan.. 185-186 
Jamaica: 

Relations between the Hamburg-American Line and the Royal Mail Steam 

Packet Co. and United Fruit Co. in the American-Jamaican trade_215-218 

Services to and from the United States.214-215 

Japanese lines, discriminatory practices of. 134-136 

Java; agreement in the American-Java trade. 127 

Jebsen Line: 

Pacific Mail Steamship Co. and Kosmos Line, relations between. 198 

Service between San Francisco and Mazatlan, Mexico. 196 

Johnson, Emory R.: 

Report on relationship between intercoastal water and rail rates. 362 

Report on methods of competition used by transcontinental railroads 

against the Panama route. 360 

Report on the relations between the “Sunset-Gulf” route and the trans¬ 
continental railroads. 361 

Johnston Line; Liverpool Conference, a member of. 63 

Judson Freight Forwarding Co. 141 .147 

Juneau Steamship Co.: 

Alaska Steamship Co., traffic arrangement between. 353 

Pacific Coast Co. and Alaska Stean^ip Co. own the. 353 












































SUBJECT INDEX. 


443 


K. 


Kellogg, C. B., testimony of, relative to: . Page. 

Gulf Foreign Freight Committee. 210-211 

Relations between Munson Line and Royal Mail Steam Packet Co, in the 

Cuban trade. 206-207 

P^elations between the Munson Line and the New York & Cuba Mail Steam¬ 
ship Co. in the Cuban trade. 209 

Ketchikan Wharf Co., Pacific Coast Co. and Alaska Steamship Co. own theiii 353 

Kinney, A. T., manager of various Great Lakes steamship companies. 340 

Knott, James, describes the agreements in the River Plate trade, southbound. 171 
Kosmos Line: 

New York & Pacific Steamship Co. and Pacific Mail Steamship Co., no 
agreement between in the trade to the west coast of South America.... 188 

Pacific Mail Steamship Co. and Salvador Railway Co., relations between. 197-199 
Service between Puget Sound and west coast ports of Central America and 
Mexico. 196 


L. 

Lamport & Holt Line: 

American-Brazilian agreement, a party to. 154 

Booth Line, tacit understanding between, as regards the Brazilian trade.. 169 

Brazilian-European agreement, a party to. 154 

Manchester Conference, a member of. 64 

Royal Mail Steam Packet Co. absorbs the. 154 

River Plate agreement (southbound), a party to. 170 

River Plate northbound agreement, a party to. 174 

Trinidad agreement, a party to. 218 

Lay, J, G., report relative to deferred rebates in the Brazilian trade. 162-163 

Lehigh Valley Railroad Co.: 

Lehigh Valley Transportation Co. owned by the. 317, 318 

Mutual Transit Co. controlled in part by the.317,318 

Lehigh Valley Transportation Co., Lehigh Valley Railroad Co. owns the_317, 318 

Levant, agreements in the trade to and from the United States.86-88 

Ley land Line: 

Agreement V, a party to. 34 

Conference of West India Atlantic Steamship Companies, a party to. 200 

Harrison and Elder Dempster Lines, operating in harmony with.. 57-58 

Liverpool Conference, a member of. 63 

London Conference, a member of. 62 

New York Central & Hudson River Railroad Co., agreement between. 242, 245-246 
L’Hommedieu, H. S., testimony of, in relation to fighting ships, use of in the 

Atlantic-Gulf coastwise trade. 394 

Lilly, J. T., testimony of, relative to: 

Maintenance of American and European rates to Australia on a parity.... 104 

Norton Line’s relations to the River Plate conference lines. 174 

Liverpool Conference (freight). 61-65 

Lloyd Braziliero: 

Amazon district, withdrawal from the... 169 

Arbuckle Bros.’ statement concerning the service of the. 167 

Brazilian Government subvention received by...... 165 

Inability to overcome effects of deferred rebates in the Brazilian trade.. 164-168 

An independent line in the Brazilian-American trade. 154 

Follows closely the rates of the Brazilian conference lines. 168 

London Conference (Brazilian-American trade). 159-160 

London Conference (freight). 61-65 

London Conference (south and east African trade). 95 

Louisville & Nashville Railroad Co., Funch, Edye & Co., agreement between_ 
with reference to Pensacola.-. 256-257 


Lowry, Wm., testimony of, relative to effect of deferred rebates in the Bra¬ 
zilian trade. 


M. 

Maine Central Railroad Co.: 

Bull Steamship Co. is refused a traffic arrangement by the 

Marine interests, extent of. 

Maine Coast Co.: 

Marine interests, extent of. 

Service of. 


. 401 

374, 377 

. 372 

. 381 








































444 


SUBJECT INDEX. 


Maine Steamship Co.: Page. 

Eastern Steamship Corporation acquires the. 378 

Marine interests, extent of. 378 

Mallory Steamship Co.: 

A. G. W. I. controls the. 384 

Marine interests, extent of. 384, 389 

Morgan Line, relations between. 390-391 

Route of. 389 

Manchester Conference (freight). 61, 64, 65 

Manchester Liners, Manchester Conference, a member of. 64 

Marine insurance: 

Discrimination against independent lines by marine underwriters. 395 

Premiums reduced through conferences and agreements. 297 

Martinique, conditions in the trade to and from. 219-222 

Matson Navigation Co.: 

Alexander & Baldwin (Ltd.) are large stockholders in the. 368 

American-Hawaiian Steamship Co., charter relations between. 366 

Hawaiian service of. 365, 366 

Inter-Island Steam Navigation Co., affiliations between. 367-368 

Marine interests, extent of. 366 

Mediterranean: 

Eastbound freight agreements. 82-83 

Westbound freight traffic agreement of 1911. 78-82 

Effect of Mediterranean agreements upon freight rates. 83 

Mediterranean conferences: 

Freight. 59-60 

Passenger.46-48 

Merchants & Miners Transportation Co.: 

Marine interests, extent of. 374, 375, 383, 387 

New York, New Haven & Hartford R. R. Co. owns majority of stock in 

the. 375,376 

Routes of the. 382,387-388 

Trust agreement governing the voting of its stock. 375-377 

Merchants’ Yukon Line: 

Marine interests, extent of. 354 

Western Alaska Steamship Co., traffic arrangement between. 354 

Yukon River service of. 352 

Metropolitan Steamship Co.: 

Eastern Steamship Corporation acquires the. 378 

Marine interests, extent of. 378 

Mexican National Steamship Co., service along the Pacific coast of Mexico_ 196 

Mexico: 

Agreement between the Munson Line and the Mobile & Ohio and South¬ 
ern Ry. Cos. with reference to the Mobile-Mexico trade. 253 

Relations between the lines operating in the American trade to and from.. 189- 

191,195-203 

Middle and South Atlantic coastwise trade: - 

Lines, enumeration of. 383 

Lines, number of, in the. 404 

Lines not controlled by railroads or by the A. G. W. 1. 388-389 

Lines operating between leading ports.J. 382 

Railroads and steamship lines, traffic relations between. 398-401 

Railroad-owned lines in the. 383, 386-388 

Railroads’ refusal to prorate vdth independent lines. 400-401 

Routes in the. 383 

Miller^ C. A., rejport relative to the New York and Cuba Mail Steamship Line’s 


Minimum rate agreements. 282-283 

Mississippi River, railroad competition with water lines on the. 407-408 

Mississippi Valley, South America & Orient Steamship Co. (See Pan-American 
Man Line.) 


Mitchell, John, manager of Buffalo Steamship Co. and Cleveland Steamship 

Co.. 339,341,342 

Mobile, railroad agreements with leading foreign steamship lines at. 250-255 

Mobile Liners; Mobile & Ohio and Southern Ry. Cos., agreement between... 250- 

251, 253-255 














































SUBJECT INDEX. 


445 


Mobile & Ohio Ry. Co.: Page. 

Mobile Liners, agreement between. 250-251, 253-255 

Munson Line, copy of agreement between as regards the South American 

trade. 264-271 

Munson Line, agreements between. 250-253 

Monopolistic nature of agreements and conferences. 304-306 

Mon tank Steamboat Co. 381 

Montes Line, not a party to any agreement or understanding in the American- 

Mexican trade. 189 

Morgan, H. H., report on agreements between lines operating to and from Spain. 
Morgan Line. (iScc Southern Pacific Co.) 

Moss Line, liCvant-American trade, party to agreement for the regulation of 

this trade. 

Munson Line; 


85 


87 


Boston & Havana Steamship Co. represented by Munson Line at Boston.. 209 

Caribbean Conference, a member of. 208 

Compania Maritima Cubana represented by the Munson Line at New York. 206 

Gulf Foreign Freight Committee, a member of. 207 

Mobile & Ohio and Southern Railway Cos., agreements between. 250-253 

Mobile & Ohio and Southern Railway Cos., copy of agreement between, 

as regards the South American trade. 264-271 

New York & Cuba Mail Steamship Co., relations between, in the Cuban trade 209 

Royal Mail Steam Packet Co., relations between, in the Cuban trade_ 206-207 

Services between the Atlantic seaboard of the United States and the west 

coast of South America, via Panama. 180 

Service between Baltimore and Cuba. 208 

Understanding with New York lines operating between New York and 

Colon. 181 

Mutual Transit Co.: 

Controlled by the New York Central, Lehigh Valley, Erie, and Delaware, 

Lackawanna & Western Railroad Cos... 317, 318 

Northern Steamship Co.’s freight vessels acquired by the. 319 


N. 

National Steam Navigation Co., of Greece, relation to Mediterranean conference 


lines. 84 

Nelson (Charles) Co. 350 

New Bedford, Martha’s Vineyard & Nantucket Steamboat Co., marine interests, 

extent of. 374 

New England coastwise trade. 372-383 

Independent lines engaged in the..... 380-381, 383 

New England Navigation Cb., trust agreement governing the voting of Merchants 

& Miners Transporation Co.’s stock, a party to. 375-377 

New England Steamship Co., marine interests, extent of. 374 

New Orleans, an open port... 239, 250 

Newport News, agreements between railroads and foreign steamship lines at. 248-249 
New York: 

Agreements between railroads and foreign steamship lines at. 241-242 

An open port. 239 

Atlantic coastwise services of. 370 

New York & Baltimore Transportation Line; 

Marine interests, extent of... 383 

Railroads’ refusal to prorate with. 388 

Routes of...382, 388 

New York Barge Canal Terminal Commission, report relative to the— 

Absence of through joint rates on Erie Canal traffic. 327 

Railroad control of Erie Canal lines. 326 

Railroad control of ErieCanal terminal facilities at Buffalo and New York. 327-328 

Volume of through freight on the Erie Canal. 325 

New York Canal Forwarders’ Association. 326 

New York Central & Hudson River Railroad Co.: 

Cunard Steamship Co., agreement between. 242, 245 

Leyland Line, agreement between. 242, 245-246 

Mutual Transit controlled in part by the. 317, 318 

Western Transit Co. owned by the. 317, 319 








































446 


SUBJECT INDEX. 


Page. 

New York Committee (south and east African trade). 95 

New York Committee of steamship line representatives, report of. 299, 

• 300, 301, 302, 302-303, 303, 305 

New York Conference (Brazilian-American trade). 159-160 

New York & Cuba Mail Steamship Co.: 

Affiliation with the Conference of West India Atlantic Steamship Com¬ 
panies. 190 

Agreements or understandings, not a party to, in the American-Mexican 

trade. 189 

A. G. W. I. controls the. 384 

Caribbean Conference, a member of. 

Compania Maritima Gubana, former agreement between, for the division 

of Cuban ports. 205-206 

Compania Maritima Cubana, portion of its stock held by the. 206 

Compania Maritima Cubana, recent agreement between, with reference to 

Cuba. 285 

Gulf Foreign Freight Committee, a member of. 206 

Hamburg-American Line, relations between, in the south Cuban trade.. 207-208 

Marine interests, extent of. 384 

Munson Line, relations between, in the Cuban trade. 209 

Ownership of stock in other navigation companies. 384 

Position in the traffic to and from Tampico and Vera Ouz. 189-190 

Services of the. 385 

Service between New York and Havana. 205 

Service to south Cuban ports. 207 

New York & Demerara Steamship Co., service to Martinique and Guadeloupe. 219 
New York Lubricating Oil Co., contracts in the South and East African trade. 96 
New York, New Haven & Hartford Railroad Co.: 

Eastern Steamship Corporation, relations between. 379-380, 381 

Long Island Sound Lines, reasons for acquisition of. 377-378 

Marine interests, extent of. 373, 374, 380, 405 

Merchants & Miners Transportation Co., majority of stock owned by the. 375, 376 

New England coastwise trade, dominant position of, in the. 380-381 

New York & Pacific Steamship Co. (“Merchants’ Line”): 

Kosmos Line & Pacific Mail S. S. Co., no agreement between, in the trade 

to the west coast of South America. 188 

Service between New York and the west coast of South America.184-188 

New York & Porto Rico Steamship Co.: 

A, G. W. I. controls the. 384 

Bull Steamship Co., rate war between, in the Porto Rican trade. 229-233 

Caribbean Conference, a member of. 208 

Insular Line, relations between. 229, 233-235 

Marine interests, extent of. 384 

Services of the. 385 

Services to Porto Rico. 226 

Special contracts with shippers in the Porto Rican trade. 236-237 

New York & South America Line, service between New York and the west 

coast of South America. 184-188 

New Zealand. (See Australasia.) 

Nippon Yusen Kaisha: 

Calcutta-Pacific Conference, a member of. 143 

Great Northern Railway Co., agreement between. 151-152 

Great Northern Railway Co., copy of agreement between. 279-280 

Trans-Pacific Tariff Bureau (Japan branch), a member of. 131 

Trans-Pacific Tariff Bureau (Hongkong and China branch), a member of.. 128 

Trans-Pacific Tariff Bureau (westbound), a member of. 138 

Norfolk, agreement between railroads and foreign steamship lines at. 248-249 

Norfolk & Western Railway Co.: 

Hamburg-American Line, copy of agreement between. 261-264 

Old Dominion Steamship Co.’s stock owned in part by the. 386 

United States Shipping Co., agreement between. 248-249 

North Atlantic Conference (passenger).46-48 

North Atlantic passenger traffic, extent and nature of.21-22 

Northern Central Railroad, Furness, Withy & Co., agreement between. 247 















































SUBJECT INDEX. 


447 


Northern Navigation Co.: Page. 

Alaska Packers’ Association, affiliations between. 354 

Alaska Steamship Co., traffic arrangement between. 354 

Companies absorbed by the. 354 

Companies owning the. 354 

Consolidation of various companies. 354 

Marine interests, extent of. 354 

Yukon River service of. 352 

Northern International Transoceanic Traffic Association. 76-77 

Northern Michigan Transportation Co. 331, 334 

Northern Pacific Railway Co.: 

China Mutual Steamship Co., agreement between. 148-150 

Holt, Alfred, & Co. (representing the Ocean and China Mutual Steamship 

Cos.), copy of agreement between. 276-277 

Ocean Steamship Co., agreement between. 148-150 

Northern Steamship Co., Great Northern Railway Co. owns the. 319 

North German Lloyd: 

Agreement A A, a party to. 31 

Agreement G, a party to. 29 

Agreement J, a party to. 30 

Agreement L, a party to. 28 

Agreement N, a party to. 30 

Agreement V, a party to... 34 

Agreement W, a party to..... 33 

Baltic Pool agreements, a party to... 72 

Brazilian-European agreement, a party to.. 154 

Hamburg-American Line, agreement between as regards sailings from 

American ports north of Savannah to Hamburg and Bremen. 71, 284 

Mediterranean steerage agreement of 1909, a party to. 35 

Mediterranean westbound freight agreement of 1911, a party to. 79 

N. D. L. V. and affiliated passenger agreements, a party to. 26 

N. D. L. V. westbound freight agreement, a party to. 65-67 

Special agreement A, a party to. 38 

Special agreement B, a party to. 39 

Northland Steamship Co., southeastern Alaska route, service on the. 352 

North Pacific Steamship Co.: 

Harriman lines refuse to prorate with, out of Portland. 349 

Pacific coast service of. 347, 348 

Railroads, relations between. 349 

Rate cutting by the. 351 

Norton Line, relation to the River Plate conference lines. 174, 284 

Norway, relations between lines operating to and from. 78 

Norway-Mexico Gulf Line, proposed agreement with the Swedish-American 

Mexico Line. 78 

Norwich & New York Propeller Co. 381 

O. 

Oceanic Steamship Co.: 

Australasian service of. 106-107 

Calcutta-Pacific Conference, a member of. 143 

Hawaiian service of. 365, 366 

Marine interests, extent of. 366 

Northern Pacific and Great Northern Railway Cos., agreement between.. 148-150 
Northern Pacific and Great Northern Railway Cos., copy of agreement 

between. 276-277 

Trans-Pacific Tariff Bureau (Japan branch), a member of. 131 

Trans-Pacific Tariff Bureau (Hongkong and China branch), a member of.. 128 

Trans-Pacific Tariff Bureau (westbound), a member of. 138 

Ocean Steamship Co. of Savannah: 

Central of Georgia Railway Co. owns the. 387 

Marine interests of. 383, 387 

Routes of. 382 

Old Dominion Steamship Co.: 

Marine interests, extent of.,383, 387 

Railroads owning the. 386-387 

Routes of....- 382 

Virginia Navigation Co. owned by the. 386-387 






















































448 


SUBJECT INDEX. 


Page. 

Olson & Mahony Steamship Line. 350 

Open River Transportation Co. 408 

Oral understandings between steamship lines, prevalence of. 293-294 

Oregon-Washington Railroad & Navigation Co.: 

San Francisco & Portland Steamship Co. owned by the. 350 

Orient. {See Agreements, Asia, and Conferences, Asia.) 

Orr-Laubenheimer Co.: 

Position in the trade to and from ports of British Honduras. 191 

Position in the trade to and from Guatemala. 191-192 

Osaka Shosen Kaisha: 

Calcutta-Pacific Conference, a member of. 143 

Chicago, Milwaukee & St. Paul Railway system, agreement between-150-151 

Chicago, Milwaukee & St. Paul Railway system, copy of agreement be¬ 
tween. 278-279 

Trans-Pacific Tariff Bureau (Japan branch), a member of. 131 

Trans-Pacific Tariff Bureau fHonkong and China branch), a member of... 128 

Trans-Pacific Tariff Bureau (westbound), a member of. 138 

P. 

Pacific-Alaska Navigation Co., Alaska Coast Co. is controlled by the. 356 

Pacific Coast Co.: 

Juneau Steamship Co., one-half of its capital stock is owned by the. 353 

Ketchikan Wharf Co., one-half of its capital stock is owned by the. 353 

Pacific Coast Steamship Co. is owned by the. 352-353 

Pacific coast, steamship company affiliations on the. 347-368 

Alaska-Puget Sound trade. 351-356 

Hawaiian trade. 365-368 

Intercoastal trade. 357-365 

Pacific coast trade proper. 347-351 

Pacific Coast Steamship Co.: 

Alaska Steamship Co., former traffic arrangements between. 353 

Nome route service of. 351 

Pacific Coast Co. owns the. 352-353 

Pacific coast service of. 347, 348 

Railroads, traffic relations between. 349 

Southeastern Alaska route, service on the. 352 

Western Alaska Steamship Co.’s stock to the extent of one-third owned bv 

the.353 

White Pass & Yukon Route controlled in part by the. 354-356 

Pacific coast trade proper: 

Lines, enumeration and description of. 347-349 

Lines, number of, in the. 404, 405 

Railroad-owned lines, extent of. 404, 405 

Relations between lines in the. 349-351 

Pacific Mail Steamship Co.: 

Agreements, none with lines operating between Pacific ports of the United 

States and the west coast ports of Mexico and Central America. 196-197 

Atchison, Topeka & Santa Fe Railway Co., through routing arrangement 

between. 148 

Calcutta-Pacific Conference, a member of. 143 

Conference of West India Atlantic Steamship Companies, relations be¬ 
tween. 201-202 

Deferred rebates, circular of. 131-132 

Deferred rebates to shippers, discontinuance of, on shipments from Central 

America and Mexico to San Francisco. 199-200 

Dominant position in the trade between San Francisco and west coast ports 


Hawaiian service of. 365, 366 

Kosmos Line and New York & Pacific Steamship Co., no agreement be¬ 
tween in the trade to the west coast of South America. 188 

Kosmos Line and Salvador Railway Co., relations between. 197-199 

Pacific coast service of. 347, 348 

Panama Railroad Co., traffic arrangement between. 363-364 

Panama service of. 358 

San Francisco & Portland Steamship Co., affiliations between. 350 















































SUBJECT INDEX. 


449 


Pacific Mail Steamship Co.—Continued, 

Service between San Francisco and ports on the west coast of Mexico and Page. 


Central America. 196 

Southern Pac^c Co. owns a majority of the stock of the. 360 

Southern Pacific Co., through routing arrangement between. 148 

Toyo Kisen Kaisha, agreement between. 139-141,147 

Transcontinental railroads, relations between. 360 

Trans-Pacific Tariff Bureau (Japan branch), a member of. 131 

Trans-Pacific Tariff Bureau (Hongkong and China branch), a member of.. 128 

Understanding with northern Pacific coast lines as to the Asiatic passenger 

traffic. 142 

Pacific Navigation Co.: 


Alaska-Pacific Steamship Co., traffic agreement between. 347, 349 

Pacific coast service of. 347, 348 

Railroad relations between. 349-350 

^ Pacific Steam Navigation Co.: 

Chilean and Peruvian steamship lines, relations between... 182-184 

Royal Mail Steam Packet Co. absorbs the. 180 

Panama Railroad Co.: 

American-Hawaiian Steamship Co., relations between. 363-365 

California-Atlantic Line, traffic arrangement between. 363-364 

Pacific Mail Steamship Co., traffic arrangement between. 363-364 

Panama Railroad Steamship Line: 

American-Hawaiian Steamship Co., comparison of rates charged. 362-363 

Rate understanding in the trade to and from the west coast of South 

America via Panama, a party to. 180-181 

Relation to the Conference of West India Atlantic Steamship Cos. 201-202.. 

Route of. 358 

Panama route in the intercoastal trade. 358, 359 

Pan American-Argentine Line, River Plate lines operating from New Orleans, 

understanding between.. 171 

Pan American Mail Line, inability to overcome effects of the deferred rebate 

system. 164-165 

Pappayanni Line, Levant-American trade, party to agreement for regulation 

of this trade. 87 

Peck (W. E.) & Co.: 

Name changed to the Insular Line. 228 

Insular Line, relations between. 228 

Former participation in the Porto Rican trade. 228 

Peninsular & Occidental Steamship Co.: 

Florida East Coast Railway Co. and Atlantic Coast Line Railway Co. own 

the... 388 

Gulf Foreign Freight Committee, a member of. 209 

Marine interests, extent of. 388 

Routes of.;. 388 

Pennsylvania Railroad Co., Erie & Western Transportation Co. controlled by 

the... 317-318 

Pensacola, agreement between Funch, Ed ye & Co. and the Louisville & Nash¬ 
ville Railroad Co. 256-257 

Pere Marquette Line Steamers: 

Pere Marquette Railroad Co., agreement between. 334-335 

Service of.^31, 334 

Pere Marquette Railroad Co., Pere Marquette Line Steamers, agreement be- 
tween... 334—335 

Penivian Steamship Line, Pacific Steam Navigation Co. and Chilean Steam¬ 
ship Line, relations between...-.- - - .182-184 

Philadelphia, railroad agreements with foreign steamship lines at. 246-248 

Philadelphia & Gulf Steamship Co.: 

Marine interests, extent .. 383, 389 

Route of. 

Southwestern Tariff Committee, membership in refused to the. 397 

Philadelphia-Manchester Line, Philadelphia & Reading Railway Co., agree¬ 
ment between. 246-247 

Philadelphia & Reading Railway Co.: 

Allan Line, agreement between. 246-247 

Furness, Withy & Co., agreement between. 246-247 

Hamburg-American Line, agreement between. 246-247 

Holland-American Line, agreement between. 246-247 . 


25655°— VOL 4—14-29 
















































450 


SUBJECT INDEX. 


Philadelphia & Beading Railway Co.—Continued. Page. 

Philadelphia-Mancheeter Line, agreement between. 246-247 

Philadelphia Trans-Atlantic Line, agreement between. 246-247 

Scandinavian-American Line, agreement between. 246-247 

Philadelphia Trans-Atlantic Line: 

London Conference, a member of. 62 

Philadelphia & Reading Railway Co., agreement between. 246-247 

Philippines, agreements in the Japan-Philippine trade....141-142 

Phoenix Line, Antwerp, agreement with International Mercantile Marine Co. 

relative to port of Antwerp. 68-69 

Pickands, Mather & Co. 339-340, 341, 342 

Pinillos Line, Compania Transatlantica, agreement between. 84-85 

Pittsburg Steamship Co.: 

Amalgamation of various lines. 337 

Charter relations with other groups of bulk carriers. 342, 345 

Dominant bulk carrier on the Great Lakes. 344-346 

Extent of its interests. 338, 341 

Extent of interests, when compared with all groups of bulk carriers. 344 

United States Steel Corporation controls the. 337, 338 

Pooling (in general). 285-286 

Advantages of. 159 

Arguments in favor of passenger pools in the North Atlantic trade. 24-25 


Pooling. {See also Pooling, in general.) 

Ahiica— 

South and East African agreement. 91-97 

West coast of. 99 

Agreement “ AA ”. 32-33 

Agreement “L”.28-29 

Agreement between Hamburg-American Line and Royal Dutch W"est India 

Mail Line in the New York-Haitian trade. 212-213 

ACTeement between Royal Mail Steam Packet Co. and Hamburg-American 

Line as regards Central American and West Indian traffic. 177-178,181 

Asia— 

Agreement in the American-Java trade. 127 

Eastbound and westbound Asiatic agreements, via Suez_112,114,119-121 

Understanding between direct lines operating between New York and 

' India. 122-123 

Australia, agreement between direct lines in the New York-Australasian 

trade. 103-104 

Baltic pool agreements. 71-75 

Brazilian trade, discontinuance of, in the. 158 

Calcutta-Pacific Conference. 143-144 

Mediterranean steerage agreement of 1909. 35-36 

Mediterranean westbound freight agreement of 1911. 79 

N. D. L. V. agreement.26-28 

N. D. L. V. westbound freight agreement. 66 

North Atlantic passenger traffic, in the. 23-25 

River Plate trade (southbound), none existing in the. 171 

Special agreement “ A ”. 38 

Special agreement “ B ”. 39 

united Kingdom, in the eastbound trade to the. 65 

Port Aransas, agreement between Punch, Edye & Co. and the Aransas Channel 

& Dock Co.^_ 257 

Port Arthur, agreement between the Port Arthur (Tex.) Transatlantic Line 

and the Texarkana & Fort Smith Railway Co. 255-256 

Port Arthur (Tex.) Transatlantic Line, Texarkana & Fort Smith Railway Co., 

agreement between. 255-256 

Port Huron & Duluth Steamship Co. 331, 334 

Porto Rico: 

Contracts with shippers. 236, 238 

Discrimination in rates between shippers. 236-238 

Enumeration of regular line services in the trade to and from the United 

States.... 225-226 

Rate wars in the Porto Rican trade. 226-233 

Rates from New York and from New Orleans and Galveston compared... 235 

Relations between the Insular and New York & Porto Rico Steamship 

, Lines. 233-234 

Volume of trade. 225 




















































SUBJECT INDEX. 


451 


Po^, di^sion of, agreement between Hamburg-American Line and Koval Page. 

Dutch ^est India Mail Line in the New York-Haitian trade.212-214 

Ports of sailing, allotting by agreement. 281 285 

Preston, A. W., testimony of, relative to the attitude of the lines in charging and 
maintaining rates in the traffic between New York and the west coast of South 
America via Panama.... loo 

T* XO^ 

Prince Line: 

American-Brazilian agreement, a party to. 154 

Booth Line, tacit understanding between as regards the Brazilian trade. . 169 

Brazilian-European agreement, a party to. 154 

River Plate agreement (southbound), a party to_170 

South and East African freight agreement, a party to 91 

Prorating: 

Atlantic coastwise trade, prorating arrangements in the. 398-401 

Atlantic coastwise trade, refusal of railroads to prorate with independent 

lines in the. 400-401 

Railroads refusal to prorate with independent lines___ .*.....!..!!... 388-389 

Providence, Fall River & Newport Steamboat Co. 381 

Publicity of agreements. !!!!!!!!].!! 311-313 

Puget Sound-Alaska trade. ]]!!!!!!!!!!! 351-356 

l^utes...351-352 

Steamship consolidations. 352-356 

Purcell, Joseph, testimony of, relative to the advantages derived by shippers 
from Brazilian conference lines. 163 

^ Q. 

Quebec Steamship Co.: 

Contracts with shippers in the Guadeloupe and Martinique trade.219-222 

Dominant position m the trade to and from Martinique, Guadeloupe, and 

Barbados. 219 

Rate arrangement in the New York-Bermuda trade, a party to. 222 

Rebates, allowance of, in the Guadeloupe and Martinique trade.219-222 

Strauss, R. D., & Co., oppose rebate system used by the. 224-225 

R. 

Railroad agreements with foreign steamship lines. (See also Railroads.) 

In general... 292-293 

Atlantic ports, with reference to. 241-250 

China Mutual Steamship Co., with Northern Pacific Ry. and Great North¬ 
ern Railway Cos. 148-150 

“Exclusive” and “preferential” agreements compared and distin- 


Exhibits of agreements. 258-280 

Extent of agreements. 239-241 

Gulf ports, with reference to. 250-257 

Nippon Yusen Kaisha with Great Northern Railway Co. 151-162 

North Atlantic passenger traffic, in the.48-51 

Conditions of such agreements.48-49 

Economic utility of such agreements.49-51 

Criticism of existing agreements. 51 

Ocean Steamship Co. with Northern Pacific and Great Northern Railway 

Cos. 148-150 

Osaka, Shosen Kaisha with Chicago, Milwaukee, & St. Paul Railway 

System. 150-151 

Pacific Mail Steamship Co., through routing arrangements with railroads ... 148 

Toyo Risen Kaisha with Western Pacific Railway Co. 146-148 

Trans-Pacific Steamship lines, with the. 145-152, 257-258 

Railroads: 

Atlantic coastwise lines controlled by.... 369, 370 

Atlantic coastwise trade, extent of railroad-owned lines in the. 403, 404 

Atlantic coastwise trade, traffic arrangements with steamship lines in the. 398-401 

Canals controlled by the.... -. 408 

Chartering space of competing steamship lines. 410 

Coastwise trade, extent of railroad-own^ lines in the entire.401, 405, 406 

Competition of, with water lines on inland waterways. 406-^08 

Conferences governing rail and water transportation. 309-31 I 

Differentials in the Middle and South Atlantic trade. 389 















































452 


SUBJECT INDEX. 


Railroads—Cntinued. Page. 

Erie Canal controlled by the. 324-328,408 

Erie Canal boat lines acquired by the.. 325-326 

Erie Canal, railroad control of terminal facilities atBiiffalo and New York. 327,328 


forwarding agencies.. 328-331 

Great Lakes, extent of railroad-owned lines on the. . 404, 405 

Great Lakes, failure to improve package freight-service on the. 330-331 

Great Lakes grain traffic, attempt to secure control of. 320, 323 

Great Lakes, methods of preventing competition in the through-package 

freight business on the. 319-331 

Great Lakes, relation between railroad-owned water lines. 330 

Hudson River, refusal of railroads to prorate with lines on the. 408 

Inland waterways, railroad control of shipping interests on the. 406-408 

Methods of controlling water-lines summarized. 409-412 

Middle and South Atlantic coastwise trade, lines owned by railroads in 

the. 386-388 

New England coastwise lines controlled by. 372 

Pacific coast, extent of railroad-owned lines on the... 404, 405 

Pacific coast trade proper, relations between railroads and steamship lines 

in the. 349-351 

Policy of charging full local rates from Buffalo to the seaboard on ex-lake 

grain. 320-323 

Prorating, refusal to prorate with steamship lines. 349-350, 388-389 

Reasons for acquiring steamship lines. 406 

Terminals, control of water terminals by.410-411 

Texas traffic, arrangement between railroads and steamship lines for the 

regulation of. 399-400 

Through-package freight lines on the Great Lakes owned by.317-331 

Transcontinental railroads, methods of competition against the Panama 

route. 359-361 

Rate agreements: 

Differential rate agreements. 283 

Minimum rate agreements. 282-283 

Rate agreements summarized. 282-284 

Rates controlled by a dominant line..'... 283-284 

Rate cutting, disadvantages of. 297-298 

Rate wars: 

Disadvantages of. 297-298, 300-301 

Porto Rican trade, in the. 226-233 

Rates. {See also Rates, determination and maintenance of; and Rates, Amer¬ 
ican and European to foreign markets on a parity.) 

Factors influencing ocean rates. 305-306 

Great Lakes, rates charged by nonrailroad-owned lines on the. 335-336 

Great Lakes, lake-and-rail and canal-and-lake rates compared with all-rail 

rates. 328-331 

Great Lakes, lower rates in the bulk traffic. 336-337 

Impracticability of filing ocean rates with the Government and requiring a 

period of notice before changing the same. 309-311 

Recent rise in ocean rates. 299, 305 

Rates, American and European rates to foreign markets on a parity: 

In general. 168-169. 301-302 

African trade (south and east). 93-94 

Australian trade. 104-105 

Cuban trade. 211-212 

River Plate trade. 171-172 

Rates, determination and maintenance of: 

Africa, North African ports. 100-101 

Africa, South and East African trade. 93-94, 95-96 

Africa, west coast of Africa trade. 98-99 

Alaska, Nome route. 351 

' Alaska, Southeastern route. 352 

Alaska, Southwestern route. 352 

Al^ka, Yukon River route. 352 

Asiatic trade, eastbound and westbound Asiatic agreements, via 
Suez. 115-117,121-122 



















































SUBJECT INDEX. 


458 


Rates, department and maintenance of—Continued. Page 

Australia, in the direct trade from New York.. 104 _i 

Baltic pool agreements. . 79 ^^76 

Bombay-United States trade, via Europe. . ’ i 9 k 

Brazihan-American trade. . 1 Trq 

Calcutta-Pacific Conference.[ *.* V.*.** . 140 

Central American trade. !!!!]] . 704 

Egyptian-American trade, via Liven)ooi.*.’..im Tno 

Erie Canal. . 

Great Lakes, policy of raiiroads to charge full local rates from’ ’Bu’ffa’lo to 

the seaboard on ex-lake gram. Q 9 n_<} 9 Q 

Gulf Foreign Freight Committee.] .*. 90^919 

Haitian trade to and from New York. . 

Hawaiian trade.’/. ^367 

Holt (Alfred) & Co. and Northern Kcific and GrVaV Nortliern 

agreement between. ’’ 

Intercoastal trade. qai_ 9 aq 

Jamaican trade. !!]!!!!!!! .oi 7 _ 9 i« 

Levant trade. !!!!!!!!!!! . 87-88 

Madras-United States trade, via Europe. 226 

Martinique and Guadeloupe trade.. 219—^22 

Mediterranean eastbound freight agreement. !!!!!!!!]! . 82-83 

Mediterranean westbound freight agreement of 1911. .V.".!!!!!!!!!!!]’!!.! 79-80 
Mexico and Central America, in the trade between American Pacific ports 

and Mexico and Central America. 297 

N. D. L. V. westbound freight agreement..*.* i 66-67 

Northern International Transoceanic Traffic Association.. 77 

Pacific coast trade proper. ’.***[ [ * 349-351 

Rate cutting, disadvantages of. !!!!!!!!”! 297-298 

Royal Mail Steam Packet Co. and the Hamburg-American Line, agree¬ 
ment between, in the West Indian and Central American trade. 178 

South America— 

River Plate trade. 170-172 173 

West coast of South America via Panama. 180-181 

West coast of South America-New York trade northbound. 182-183 

Stability of rates secured through agreements and conferences. 297-300 

Trans-Pacific conferences. 137-138 

Trans-Pacific Tariff Bureau (Hongkong and China branch). 133-134 

Trans-Pacific Tariff Bureau (Japan branch). 130-131 

Trans-Pacific Tariff Bureau (westbound). 138-139 

Trinidad trade, northbound. 219 

United Kingdom. 61-65 

Uniform freight rates to all merchants secured through agreements and con¬ 
ferences. 300 

Venezuela and Curacao, in the traffic to and from. 176 

West Indies— 


North Cuban ports. 207 

Porto Rican-Gulf trade. 235-236 

Porto Rican trade, discrimination in rates between shippers in the. 236-238 
Ravndal, G. B., report on relations between lines engaged in the American- 

Levant trade. 86, 87-88 

Raymond, H. H., testimony of, relative to: 

Absence of port-to-port competition on the Atlantic coast. 371-372 

Mallory and Morgan Lines, close relations between. 391 

Shipping consolidations, reasons for organizing. 406 

Texas traffic arrangement between railroads and Atlantic coast steamship 

lines. 399-400 

Rebates. (See Deferred rebates.) 

Recommendations of witnesses for proposed legislation. 307-314 

Elimination of discrimination between shippers. 313 

Government regulation of foreign carriers. 307-308 

Impracticability of filing ocean rates with the Government and requiring a 

period of notice before changing the same. 309-311 

Publicity of agreements. 311-313 

Rebating to be prohibited. 313 






















































454 


SUBJECT INDEX. 


Red “D” Line: Page. 

Caribbean Conference, a member of. 208 

Porto Rico— 

Rate war with other Porto Rican lines. 228-229 

Service to Porto Rico. 226 

Royal Dutch West India Mail Line, agreement between, governing the 

traffic to and from Venezuela and Curacao. 175-176 

Red Star Line: 

Agreement A A, a party to. 31 

Agreement G, a party to. 29 

Agreement J, a party to. 30 

Agreement L, a party to. 28 

Agreement N, a party to. 30 

Agreement V, a party to. 34 

Agreement W, a party to. 33 

Antwerp, agreement with the Phoenix Ifine relative to the port of. 68-69 

International Mercantile Marine Co. controls the. 71 

Minimum rate agreement from Channel ports, a party to. 70 

N, D. L. V. and affiliated passenger agreements, a party to. 26 

N. D. L‘. V. westbound freight agreement, a party to. 65-67 

Regularity of service secured through agreements and conferences, and advan¬ 
tages resulting from such regularity. 295-296 

Retaliation feared by shippers if they oppose conference lines. 306, 313 

Richardson, Norval, report on agreements between lines operating to Scanda- 

navian and Ilussian-Baltic ports. 75-76 

River Plate: 

Agreements in the American trade, southbound. 170-174 

Agreement in the American trade, northbound. 174-175 

American and European rates on a parity. 171 

Contracts with shippers. 172-174 

Deferred rebates in the northbound trade. 174 

Norton Line’s relations to the conference lines. 174 

Understanding between Brazilian and River Plate conference lines to re¬ 
spect each other’s territory. 175 

Robertson, W. H., report relative to the relations between steamship lines 

operating on the west coast of South America. 183-184,187-188 

Rogers, H. H., testimony of, with reference to the relations between the Panama 

Railroad Co. and the American-Hawaiian Steamship Co. 365 

Royal Commission on Shipping Rings, report of: 

Africa, west coast of Africa trade. 100 

Comparison of American and European rates to Australia. 104-105,106 

Hamburg-American Line, agreement between, in the New York-Haitian 

trade. 212-214 

Red D Line, agreement between, governing the traffic to and from Venzuela 

and Curacao. 175-176 

Trinidad agreement, a party to. 218 

Royal Mail Steam Packet Co.: 

Brazilian-European agreement, a party to. 154 

Caribbean Conference, a member of. 208 

Conference of West India Atlantic Steamship Companies, a party to. 200 

Hamburg-American Line, agreement between with reference to Haiti and 

Santa Marta. 214, 284 

Hamburg-American Line and United Fruit Co., relations between in the 

Jamaican trade. 215-218 

Hamburg-American Line’s Atlas service, agreements between as regards 

the Central-American and West Indian traffic. 177-179 

Lamport & Holt Line absorbed by the. 154 * 

Munson Line, relations between in the Cuban trade. 206-207 

Pacific Steam Navigation Co. absorbed by the. 180 

Rate arrangement in the New York-Bermuda trade, a party to. 222 

Rate understanding in the trade to and from the west coast of South America 

via Panama, a party to. 180-181 

Service to north Cuba. 206 

Trinidad agreement, a party to. 218 

United Fruit Co., rate understanding between, in the Caribbean trade.. - 176-177, 

179-180 
















































SUBJECT INDEX. 


455 


Russian East Asiatic Line: Page. 

Holland-American Line, agreement between, with reference to Rotterdam. 69, 284 
Northern International Transoceanic Traffic Association, a member of.... 76 

Rutland Railroad Co., Rtitland Transit Co. owned by the. 317 318 

Rutland Transit Co., Rutland Railroad Co. owns the. 317,’ 318 

Ryan, J. W., testimony of, relative to the relations between lines operating 
between New York and the west coast of South America, via the Straits of 
Magellan.. 185-186 

S. 

Sailings, regulation of: 

Eastbound and westbound Asiatic agreements, via Suez. 113-115 

Through agreements or conferences. 284-285, 302 

Salvador Railway Co.: ’ 

Pacific Mail Steamship Co. and Kosmos Line, relations between. 197-199 

Service between ports on the west coast of Central America. 196 

San Francisco & Portland Steamship Co.: 

Oregon-Washington Railroad & Navigation Co. owns the. 350 

Pacific coast service of. 347 343 

Pacific Mail Steamship Co., affiliations between. ’ 350 

Railroads, relations between. 349 

Rate-cutting by the. 35 I 

Santo Domingo, relations between lines operating to and from New York. 212 

Scandanavian-American Line: 

Baltic pool agreements, a party to. 72 

Philadelphia & Reading Railway Co., agreement between. 246-247 

United Steamship Co. owns the.•. 72 

Schedule of Inquiries: 

Circular letter submitted to American exporting and importing firms, under 

date of February 18, 1913. 17 

Department of State circular submitted to American diplomatic and con¬ 
sular officers under date of April 17, 1912. 16-17 

Number of transportation companies to whom sent.'.. 2-3 

Schedule submitted to American railroads under date of September 16, 

1912. 14-15 

Schedule submitted to domestic water carriers under date of August 21 , 

1912..... 10-13 

Schedule submitted to foreign steamship lines under date of October 3, 

1912. 13-14 

Schwerin, R. P., testimony of, relative to: 

Calcutta-Pacific Conference. 143 

Competition between Trans-Pacific and Suez lines in the Oriental trade.. 130 

Conference of West India Atlantic Steamship Cos. 201-202 

Matson Navigation Co., dominant position of, in the Hawaiian trade. 366 

Panama Railroad Co. and American-Hawaiian Steamship Co., relations 

between. 364 

Publicity of agreements. 312 

Secret cutting of rates by Japanese lines... 134-135 

Trans-Pacific Tariff Bureau (Hongkong and China branch).. 133 

Understanding between Pacific Mail Steamship Co. and Toyo Risen 

Kaisha westbound from San Francisco. 140-141 

Underweighing of freight by Japanese lines. 135-136 

Seaboard Air Line Railway Co.: 

Baltimore Steam Packet Co. owned by the. 387 

Old Dominion Steamship Co.’s stock owned in part by the. 386 

Seaboard & Gulf Steamship Co.: 

Coastwise Freight Conference, membership in the, refused to the. 397-398 

Houston & Brazos Valley Railroad, affiliations between. 391-392 

Marine interests, extent of. 389 

Route of. 389 

Service of. 391-392 

Seager, J. C., testimony in relation to the tacit understanding between the 

Booth Line and the tluree Brazilian conference lines.169-170 

Secrecy of agreements and conferences. 2-3, 25, 59, 84, 85, 293-295, 307, 311-313 

Seeberg Line: 

Service between Mobile and Haiti.. 212 

Service between Mobile and Jamaica. 214 












































45G 


SUBJECT INDEX. 


Sickel, W. G., testimony of, relative to: ^ Page. 

Absence of deferred rebates in the west coast of Africa trade. 100 

Agreement in the trade to the west coast of Africa. 07 

Deferred rebates in the New York-Colombian trade, northbound and south¬ 
bound. 179 

' Mediterranean eastbound freight agreement. 82--83 

Rates applying to Hamburg and Bremen.^.. . . 56-57 

Relations between Hamburg-American, Royal Mail, and United Fruit Co. 

in the Jamaican trade. 216-218 

Syndikats Rhederei. 290 

Use of combination steamers in the American-European trade. 54 

Singer Sewing Machine Co., contract with Brazilian lines. 160 

Skinner, R. P., report on the Syndikats Rhederei. 290 

Slechta, J., testimony of, relative to: 

Effect of deferred rebates in the Brazilian trade.-. 166 

Tacit understanding between the Booth Line and the three Brazilian con¬ 
ference lines. 169 

Understanding between River Plate conference and Brazilian conference 

lines to respect each other’s territory._. 175 

Volume of business secured by the Lloyd Bra/iliero. 165-166 

Sources of data obtained by the Committee. 2-6 

South African Homeward Conference. 95-96 

South African Outward Conference. 95-96 

South America. (See various countries; West coast of South America; Agree¬ 
ments; Conferences). 

Agreement between Munson Line and Mobile & Ohio and Southern Rail¬ 
way Cos. with reference to the Mobile-South American trade. 251-253 

Enumeration of services to and from the United States. 153 

Southern Pacific Co.: 

Direct Navigation Co. owned by the.T. 390 

Gulf Foreign Freight Committee, a member of. 209 

Gulf Steamship Co. owned by the. 390 

Lines acquired by the. 390 

Mallory and Morgan Lines, relations between. 390-391 

Marine interests, extent of. 405 

Morgan Line granted deferred rebates in the Atlantic-Gulf coastwise trade 395-396 

Morgan Line, route of. 358, 389 

Pacific Mail Steamship Co., a majority of its stock owned by the. 360 

Pacific Mail Steamship Co., through routing arrangement between. 148 

Replies to Committee's Schedule of Inquiries relati veto agreements with 

navigation companies. 275-276 

“Sunset-Gulf Route” of the. 358,361 

Southern Railway Co.: 

Chesapeake Steamship Co. owned in part by. 387 

Hamburg-American Line, copy of agreement between. 261-264 

Mobile Liners, agreement between. 250-251, 253-255 

Munson Line, agreement between. 250-253 

Munson Line, copy of agreement between, as regards the South American 

trade. 264-271 

Old Dominion Steamsliip Co.’s stock owned in part by the. 386 

Strachan, F. D. M., agreement between, with reference to Brunswick. 249 

United States Shipping Co., agreement between. 248-249 

Southern Steamship Co.: 

A. G. W. I. controls the. 384 

Marine interests, extent of. 383, 384, 389 

Routes of. 382, 389 

Services of the. 385 

Southwestern Tariff Committee: 

Membership of. 396 

Philadelphia & Gulf Steamship Co. refused membership in the. 397 

Purposes of. 396-397 

Spain, relationship among lines operating to and from the United States.84-85 

Stability of rates secured through agreements and conferences. 297-300 

Standard Oil Co.: 

Contract with lines in the American-Java trade. 127 

Contracts in the south and east African trade. 96 

Leading customer of direct lines in the trade from New York to India... 123-124 





















































SUBJECT INDEX. 


457 


Cl • Paffe. 

Starin Line. 

Story, Sidney, testimony of, relative to the effect of deferred* VeVaVeV in the 

Brazihan trade. 154 

Strachan, F. D. M., agreement with the Southern Railway Co. with reference 

to Brunswick. 249 

Strau^, R. D., & Co. oppose rebate system of the Quebec Steamship Co. 224-225 

SwedLsh-American-Mexico Line, proposed agreement with the Norway-Mexico 

Gulf Line. 78 

Swenson, L. S., report relative to proposed agreement between Norway-Mexico 

Gulf Line and Swedish-Mexico Line. 78 

Syndikate Rhederei. 289-290 - 

T. 

Tehuantepec National Railway Co., American-IIawaiian Steamship Co., traffic 
agreement between. 357 


Terminals: 

Buffalo, railroad control at. 323-324 

Chicago, railroad control at. 323 

Duluth, railroad control at. 323 

Texas, railroad arrangement with Atlantic coast steamship lines for the regula¬ 
tion of traffic to and from.. 399-400 

Texas City Steamship Co.; 

A. G. W. I .’8 acquisition of, method of. 385-386 

A. G. W. I. controls the. 384 

Marine interests, extent of. 384, 389 

Route of. 389 

Thompson Line, London Conference, a member of. 62 

Tomlinson, G. A., manager of various Great Lakes steamship companies. 338- 

339, 341, 342 

Totten, R. J., report on minimum rate agreement between Cunard and Austro- 

Americana Lines in the Adriatic freight traffic. 85 

Toyo Risen Kaisha: 

Calcutta-Pacific Conference, a member of. 143 

Pacific Mail Steamship Co., agreement between. 147 

Pacific Mail Steamship Co., westbound agreement from San Francisco.. 139-141 

Pacific Railway Co., agreement between. 146-148 

Trans-Pacific Tariff Bureau (Hongkong and China branch), a member of.. 128 

Trans-Pacific Tariff Bureau (Japan branch), a member of. 131 

Western Pacific Railway Co., copy of agreement between. 271-274 

Traffic associations, relation to rate making in the American coastwise trade... 410 

Tramp vessels: 


Consolidations among bulk carriers on the Great Lakes. 336-346 

Trans-Atlantic Freight Conference. 59-60 

Trans-Pacific Tariff Bureau (Hongkong and China branch). 128-129,133-134 

Trans-Pacific Tariff Bureau (Japan branch). 128-129,130-132 

Trans-Pacific Tariff Bureau (westbound)... 138-139 

Trinidad, agreement between lines operating to and from New York.218-219 

Trinidad Shipping & Trading Co., Trinidad agreement, a party to. 218 

Tussco Line, Gulf Foreign Freight Committee, a member of. 209 

U. 

Union Carbide Sales Co., contracts in the south and east African trade. 96 

Union Castle Mail Steamship Co.: 

Report of, relative to the south and east African agreement. 92-93 

South and east African freight agreement, a party to. 91 

Union Clan Line, south and east African freight agreement, a party to. 91 

Union Steamship Co. of New Zealand. Australasian service of. 107 

United Fruit Co.: 

Caribbean Conference, a member of. 208 

Conference of West India Atlantic Steamship Companies’ rates observed by 

the, as regards the New York trade.. -. 201 

Dominant position in the trade to and from ports of British Honduras. 191 

Dominant position in the trade to and from Central American ports- 283-284 












































458 


SUBJECT INDEX. 


United Fruit Co.—Continued. Page. 

Dominant position in the trade to and from Costa Rica. 194 

Dominant position in the trade to and from Guatemala. 191-192 

Dominant position in the trade to and from Nicaragua. 193-194 

Dominant position in the trade to and from Spanish Honduras. 193 

Hamburg-American Line and Royal Mail Steam Packet Co., relations 

between, in the Jamaican trade. 215-218 

Hubbard-Zemmurray Steamship Co., relations between. 193 

Orr-Laubenheimer Co., relation between. 191 

Rate understanding in the trade to and from the west coast of South 

America, via Panama, a party to. 180-181 

Royal Mail Steam Packet Co. and Hamburg-American Line, rate imder- 


Services in the American-Spanish Honduras trade. 192-193 

Services between the Atlantic seaboard of the United States and the west 

coast of South America, via Panama. 180 

Vaccaro Bros. & Co., relations between. 193 

United Kingdom; 

Harrison Direct Line’s deferred rebate circular in the United Kingdom- 

British Columbian and Puget Sound trade. 90 

Minimum eastbound rate agreements. 61-65 

Minimum westbound rate agreements. 65 

United States & Australasia Steamship Co.: 

Agreement between direct New York-Australasian lines, a party to. 103 

White Star Line, agreement between, in the New York-Australasian 

trade. 105-106 

United States & China-Japan Steamship Co., eastbound and westbound Asiatic 

agreements, via Suez.. 110-112 

United States Shipping Co. (See also Tussco Line.) 

Chesapeake & Ohio, Norfolk & Western, and Southern Railway Cos., 

agreement between. 248-249 

United States Steel Corporation: 

Contract with lines in the American-Java trade. 127 

Contract with Brazilian lines. 160 

Great Lakes rates on ore controlled by the. 344-345 

New York and South America Line controlled by the. 184 

Policy of, toward independent bulk carriers on the Great Lakes. 344-345 

Receives fecial rates in the New York-west coast of South America trade, 

via Straits of Magellan. 187 

United Steamship Co.: 

Baltic pool agreements, a party to. 72 

Gulf Foreign Freight Committee, a member of. 209 

Northern International Transoceanic Traffic Association, a member of. 76 

Scandina\nan-American Line owned by the. 72 

United Tyser Line: 

Agreement between direct New York-Australian Lines, a party to. 103 

White Star Line, agreement between, in the New York-Australasian trade. 105-106 
Uranium Steamship Co.: 

A competitor with other lines operating to and from Rotterdam. 69 

Not a member of the North Atlantic Passenger conferences. 22 

V. 

Vaccaro Bros. & Co.: 

Service between New Orleans and Spanish Honduras. 193 

United Fruit Co., relations between. 193 

Venezuela, agreement governing the traffic to and from. 174-176 

Virginia Navigation Co. owned by the Old Dominion Steamship Co. 386-387 

Volume of freight limited by agreement. 285 

W. 

Ward Line. (See New York & Cuba Mail Steamship Co.) 

Warfield, E., testimony of, in relation to— 

Close relations between the Mallory and Morgan Lines. 390-391 

Coastwise Freight Conference. 396-397 

Fighting ships, use of, in the Atlantic-Gulf coastwise trade. 393-394 

Marine insurance companies’ discrimination against independent lines.... 395 

Seaboard & Gulf Steamship Co. refused membership in the Coastwise 
P'reight Conference. 398 











































SUBJECT INDEX. 


459 


Page. 

Warren Line, Liverpool Conference, a member of. 63 

Weir, Andrew, & Co., arrangement with Hansa Line and Bucknall Steamship 

Lines (Ltd.) in the trade to and from India. 122-123 

West Coast Line: 


Service between New York and the west coast of South America. 184-188 

West coast of South America: 

Relation between lines operating to and from New York, via the Straits of 

Magellan... 283 

Relations between lines operating to and from New York, via Panama. 180-184 
Relations between lines operating to and from New York, via Straits of 

Magellan. 184-188 

Relations between lines operating to and from Pacific ports of the United 

States. 18 S 

Contracts with shippers in the southbound trade. 186-187 

Relations between the lines in the northbound trade. 187-188 

Western Alaska Steamship Co.: 

Alaska Steamship Co. owns a one-third interest in the. 353 

Merchants’ Yukon Line, traffic arrangement between. 354 

Nome route service. 351 

Pacific Coast Steamship Co. owns a one-third interest in the. 353 

Western Pacific Railway Co.: 

Toyo Risen Kaisha, agreement between. 146-148 


Western Transit Co.: 

New York Central & Hudson River Raihoad Co. owns the. 317, 319 

Other leading lines notified of changes in rates. 330 

White Pass and Yukon route: 

Alaska Steamship and Pacific Coast Steamship Cos. control the. 354-356 

White Star Line (Great Lakes line). 331,334 

White Star Line: 

Agreement V, a party to. 34 

Agi'eement W, a party to. 33 

Agreement with direct lines operating in the New York-Australian trade. 105-106 

Liverpool Conference, a member of. 63 

Mediterranean steerage agi-eement of 1909, a party to. 35 

Mediterranean westbound freight agreement of 1911, a party to. 79 

Minimum rate agreement from Channel ports, a party to. 70 

Position of, in the indirect trade from New York to Australia. 104-106 

Special Agreement A, a party to. 38 

Special Agreement B, a party to. 39 

White Star-Dominion Line, Liverpool Conference, a member of. 63 

Wilder Steamship Co., owned by the Inter-Island Steam Navigation Co. 367 

Wilkinson, H. S., manager of various Great Lakes steamship companies. 339, 341, 342 
Wilson, H. R,: 

R^ort relative to relations between the Pacific Mail, Kosmos, and Salvador 

Railway Cos. 197-198 

Report relative to the dominant position of the United Fruit Co. in the 

American-Guatemalan trade. 192 

Wilson Line: 

Baltic pool agreements, a party to. 72 

Northern International Transoceanic Traffic Association, a member of.... 76 

Wilson & Furness-Leyland Line, London conference, a member of. 62 

Wine and Spirit Traders’ Society of the United States, report of, relative to 

agreement among Channel port Lines. 70 

Winslow, A. A., report relative to the relations between steamship lines oper¬ 
ating on the west coast of South America. 184,188 

Woermann Line, agreement in the trade to the west coast of Africa, a party to. 97 
Wolvin Line: 

Only carrier between Texas ports and Tampico and Vera Cruz. 190 

Not a party to any agreement or understanding in the American-Mexican 
trade. 189 


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